Investment Q&A

Q: I'm building a non-registered account with companies that pay out a fairly high dividend (tax efficient for the dividend tax credit) and with an emphasis on growers. In particular companies that have indicated their intention of growing the dividend 5-10% annually and in some cases provided timelines as well. Looking for steady increasing income from this account but also hoping the increasing dividend will provide a floor for the stock prices against increasing interest rates expected over the next while. Time line 5-10 years.

For example, ENB who have indicated 10-12% dividend increases through 2024 (choose this over ENF who has indicated 10% increases through 2019). This should take ENB's dividend payout up to around 9%+ based on the current stock price. I've also included ECI in the account so far.

BEP/BIP don't fit the bill due to the distributions not being tax effective.

Looking for more ideas, perhaps 5-10 that I could consider adding to gain some diversification as well.

Thanks!

Q: Hi, I am curious to understand market reaction to ALA's possible merger talks with WGL Gas utility. Some of your comments suggested that ALA shareholders will welcome the news and price could go up resulting in increase of our portfolio holdings in ALA. Market seems to think otherwise, as reflected in 5% drop in ALA price in the morning trading. WGL price , on the other hand shot up 6%, yesterday and even higher today. I understand that WGL is a gas utility, which could result in a lower price multiple for ALA, if there is a merger.Financing concerns, issue of new equity could be another concern, you think? How is it compensated with the highly accretive nature of the transaction ?

I would greatly appreciate your insight.
ALA and IPL are my midstream holdings and added ALA this morning on weakness, for stable income and some growth in future.

Q: Given the approx. 5% drop in ALA's price due to a likely merger, would this be a good buying opportunity? Also, why would this (and other stocks) drop when a merger looks to be accretive long-term unless they take on a ton of debt?

Q: Two Questions:

1. I am overweight in these 3 pipeline/utilties due to run of share prices, ala,ipl and ppl should I trimm back all 3 or sell one, if you were to sell one which would it be?

2, With the recent sell off in energy stocks Vermillion is holding up better than most especially compared to similar companies such as Esso and Exxon, is this another sign of what a good core position Vermillion is or should we expect Vermillion to decline?

Thanks again for the great valuable source 5i provides.

Q: Good Morning
Can you please elaborate as to hoW the merger announced yesterday will affect the following preferred shares:

ALA.PR.U in US Funds
ALA.PR.I
Thank you
Terry

Q: ALA-tsx was halted yesterday, Thursday, Jan. 12, around news reported in "The Wall Street Journal" (the only place I could find info at 4:00 pm..)

"Canada’s AltaGas in Talks to Combine With D.C. Utility WGL
Deal could value the parent of Washington’s natural-gas utility at $5 billion to $6 billion"


Do you have more info or thoughts? I am not a subscriber to the Journal so could not read the complete article.

I suspect this will be good for both companies.

I hope ALA does more dividend increases & wonder what will happen to ALA's DRIP/SPP plan I have been in for years.

Q: My only energy holdings are equal positions of ALA, ENF and PPL. These total 7% of my equity portfolio and are held in a registered account (RRIF). In your view does this represent an over-concentration in the energy sub-sector, and if so which of the three would you sell? I could sell ENF or PPL at a profit, but would incur a loss by selling ALA. Thank you.

Q: In my 35-stock portfolio, I have a 9% overall weighting in the following:

ALA - 3%
ENB - 2.5%
TRP - 2.1%
BEP.UN - 1.4%

I am assuming that 9% is an "okay weighting" for this group (?) but my main question is, whether or not you see too much overlap in these stocks.

I know this group provides a mixture of storage and pipelines that move shale oil, crude, gas, etc. I also have exposure to renewable energy which has kept me from investing in other power-related stocks such as Fortis and Canadian Utilities.

Do you have any concerns about the weighting or overlap?

By the way, the only energy stock I have is TOU - 1.2%, if that makes any difference.

Thanks.

Jim

Q: Own half positions in each of these stocks - ALA and ECI - and plan to simplify by consolidating into one holding. Which would be your preference - for income with some capital appreciation?

Q: Your response to Brian on Dec 15 included the following comment: "if you own 85% of your portfolio in high dividend stocks, then this is more of a concern".

I am a retired, conservative, dividend-income investor, with a pension, CPP, annuities, the above listed stocks and 3 income producing MFs (RBC Cdn Equity Income, Sentry Cdn Income, Sentry Global REIT).

I fit the 85% easily. I believe my portfolio is diversified by sector and by security. I also believe the securities have, for the most part, sustainable and growing dividends. I am a "buy-and-hold investor with reasonable tolerance for volatility.

Your comments and concerns please, along with any recommended improvements. Thanks...Steve

Q: I hold this in a registerd acct. and am down about 30%
Is this one sensitive to rising interest rates and if so, should I sell it now before rates increase?

Q: I manage my husband's and my TFSA's as if they are one account so we do not duplicate the stocks in the 2 accounts and can have a reasonable size of position. We have a similar weighting of ALA, REI.UN, SIA, WSP, ZEB, BEP.UN, CGX, and HR.UN and PKI, and a double weighting of CPD and CDZ. We currently have about $110K in the two accounts and $20K of that is in cash. Can you suggest what we might add to or change in the above list, considering that we prefer income paying securities with some growth prospects and want the TFSA's to act independently of our other investments as a relatively conservative growth vehicle.

Q: I currently hold ALA and RNW .Would like to add AQN or EMA , which would you add ? Or would you add NWC instead.Please Place in order of preference. Thanks.

Q: Hi,
I currently hold stocks in ALA and like your opinion of this holding.
Thanks, John

Q: Hi I have some money that I want to park for a few years in a couple of stocks that are considered conservative. I am thinking of ALA and Chemtrade. They both seem reasonably priced. I will be reinvesting the dividends. Are these good choices and can you recommend a couple of others? I have considered SLF but it sure moves quickly based on interest rate news or rumours. Thanks, Bill.

Q: I would like to increase my holdings in pipeline stocks. My interest is a combination of dividends and capital gains. Which of the following would give the me the largest return over a 3 + year period - ALA, ENB, IPL, or PPL. My only current pipeline holding is TRP.

Q: Other than TransCanada. would Keystone's approval benefit Interpipeline, Pembina, Enbridge and Altagas and, of so, would it be significant. Who else would benefit?
Thanks.

Q: Hi,

I own ALA and IPL. I was going through the Q3 report for ALA and there were a couple of points that concerned me. First is that the Company has a working capital deficiency in the third quarter of $287 million for a quick ratio of 0.67. They also didn't generate enough funds from operations to cover their dividend payments and capex for the quarter. Debt to total capitalization is reasonable at 45%, but some other metrics are less rosy. I realize that some of the cash flow shortfall can be offset by the DRIP. Are you concerned by these metrics? IPL also had a small working capital deficiency in Q2 2016, but not a cash flow shortfall. Is it expected in these high leveraged businesses?

Thanks,
Jason

Q: HI Peter,
I have small positions in the three companies: ECI, ALA, and ACQ. I would like to reduce my holdings to two. I am looking for income and capital appreciation. I was thinking of selling Enercare and putting the proceeds to Altagas and leaving ACQ the way it is. Please advise. Thank you.

Q: Can I have your thoughts on todays results.
Kind Regards
Stan