Investment Q&A

Q: I manage the investment accounts for a family member who currently has a very small pension, CPP and OAS with the OAS Supplement. Her Supplement is reduced by 50 cents for every dollar of investment income she makes so she is effectively in a 50% tax bracket. Her capital comes from the recent sale of her house and the money must be available for an assisted living facility in a few years. My problem has been finding stocks to preserve capital and minimize the 50% tax bite which impacts what she has to live on currently. I have used AV.UN which has no impact on her income now and TMC which does but provides a high income. I think capital gains would be better than dividends which are grossed up. Any suggestions for appropriate investments for a 6 figure account?

Q: I'm wondering your thoughts on the large $800M+ offering today. Was debt an issue for them, causing concern for the market, or do you think they are eyeing a large aquisition? Overall, do you see this as a net positive right now?

Q: From what I read on this company,
P/E Ratio 3828.00
Earnings/Share $ 0.01
Dividend/Share $ 1.78
I do not understand why you recommend it a favourite holding.
Could you explain? I read your company report (2015).Do you still agree with an A quote?
Thank you.

Q: This question is about portfolio construction and geographical equity allocation. I am attempting to diversify my equity holdings across Canadian, U.S., International, and Emerging Markets.

How do I treat a company that has global operations, such as BEP.un?

BEP.un receives 25% of its revenue from Canada, 50% from the U.S., 5% from developed International markets, and 25% from Emerging Markets.

Should BEP.un "count" as a 100% Canadian holding because it trades on the TSX, or should I proportion my holding in BEP.un across the 4 geographical regions according to their respective revenue percentages? (Or is there an even better way to approach this?)

Thanks again for this great website and service!

Q: hello 5i:
could you please comment (generally) on the new preferred shares being offered by BEP.UN. Can I purchase these through my online broker ie BMO Investorline or Scotia iTrade? How would these preferreds compare to others being offered at the moment? The reset, pegged to Canadian Treasuries seems like good protection for the investor: is it? Would these be acceptable as the fixed income portion of a diversified portfolio for someone who is (becoming) more risk averse? Held in a TFSA, is the interest taxable or not?
thanks
Paul L

Q: I know that BEP.UN pay their cash distribution in US$ are there any other companies that are in your portfolios that pay in US$ or is BEP.UN the only company.

Thanks

Q: Can you give me an idea which one of these 3 stocks you would prefer for an entry in the renewable energy area. RNW has a higher dividend but BLX seems to have a more consistent return. Your view would be appreciated. Tnx

Q: I read the response on the dividend tax credit. Just to clarify if you have BEP.UN in an RRSP account none of this matters. Correct?

Q: To clarify an answer to an earlier question re: tax treatment of the distribution. You mentioned that distributions are not eligible for the dividend tax credit - which is not entirely correct. I have held a large position in BEP.UN for a few years. In 2015 58% of the distribution were eligible for the dividend tax credit. Another 28% of the distribution was a return of capital and only 14% of the distribution will be subject to the full tax rate. In 2014 29% of the distribution was taxed at the full rate. This of course will change from year to year. For historical taxation - have a look at their website which has a good breakdown of the tax treatment of all distributions. Hope this is helpful.

Q: Followup to recent Q. on BEP.UN. Distributions can be taken in US or C$, default is US, so if held in a C$ account broker will convert at their exchange rate. To receive in C$ you must instruct broker you want this option, I estimate it's worth at least 1% of the distributions received, not much, but better in my pocket than broker's.

The above comment was posted and I am confused by it. What exactly would I tell my discount broker? Would it be better to get the distribution in US$? Would I need to move my shares to the US listing in order to get the distribution in $US or can I just request to be paid in $US even though the stock holding is on the TSX? Would this be a good way to increase US$ over time?

Thanks
Dolores

Q: Pays a high dividend.Would this stock also be a suitable purchase for long term capital appreciation on the stock price in addition to the dividend play ?
Thank you

Q: Hi, 5i.

For pure utilities, I have BEP (2.0%) and RNW (1.5%). I also have ENB (2.0%) and IPL (1.0%) if you consider those utilities.

I'm looking to increase my utilities allocation and wondering if I should add to what I have or take a position in Fortis (or another name you recommend).

Thank you,
Robert

Q: I am choosing among FTS, AQN & BEP.UN? Are they basically in the same business? Among these three stocks, which one offers a better value and has the most potential in the future? thanks.

Q: GM,could u give me ur opinion of Ala versus Bep.un for aTFSA acc?
Tks
PS: Great service.

Q: Peter and team,

Is BEP.UN the "best" way to play our lovely politicians' relentless drive toward renewable energy? It seems the way that public policy and public opinion is going, people are going to move toward renewable power regardless of economics. Would BEP.UN continue to observe significant growth from this?

I am very scared to invest in any solar manufacturers or battery producers because they all seem so risky.

Thoughts?

Q: Hello Peter & team, thank you for the improvements to your website. I really like to see the full company names rather than just the symbols. What would be the better choice between BIP.un or BEP.un for my RRSP? I am looking for safety and income. Regards, Gervais

Q: I have done pretty well with BEP.UN but am wondering how sustainable it is at this price. With a yield of 5.96% and according to my BMO Investorline a P/E ratio of 3929. Has it just been rising on the strength of 'Renewable Energy' in its name? Thks for yr valuable insight as always.

Q: BEP.UN has very thinly traded options,(like most other CDN options). Is it worth the effort to try and add portfolio value by selling calls against my position, or selling puts if I want to increase my position? Thanks for your response....Jim

Q: Followup to recent Q. on BEP.UN. Distributions can be taken in US or C$, default is US, so if held in a C$ account broker will convert at their exchange rate. To receive in C$ you must instruct broker you want this option, I estimate it's worth at least 1% of the distributions received, not much, but better in my pocket than broker's.

Details at bottom of page here:

https://www.brookfieldrenewable.com/content/investor_relations/distributions-30413.html

Q: Hello Peter
The Negative comment yesterday on BEP.UN was from Ross Healy who rated it as "Don't Buy", and said [quoted from Stockchase.com]:
"This one is a difficult call to make. The fair market value is at or below where it is trading. The balance sheet strength is not what he would like to see. He would not be drawn to this one and he would not recommend it. It does not have the supportive earnings he would like to see."

Your comments appreciated as I hold a large position in it and have been quite pleased with the performance and income
Thanks....... Paul K