Investment Q&A

Q: I am looking to retire in the next year, and positioning our portfolio more toward income.

Within the utilities sector we held AQN, BEP.UN, BIP.UN and CPX at close to equal weights 3.1-3.3% each (market value).

I recently sold AQN at a 20% tax loss and initiated a new position in FTS (yielding 4.25% after it's big drop). This will be a long term position.

I'm up approx 50% in CPX and even on BIP.UN.

I'm currently carrying a 16% loss on BEP.UN, and am thinking of selling it for a tax loss (I have significant realized capital gains to offset).

I'm considering either splitting the proceeds between BIP, CPX and FTS; or waiting to sell BEP after the 30 day period on AQN has passed, repurchasing it to regain the lost dividends and for diversification.

From recent questions I understand that AQN's dividend is likely safe, and is considered sufficiently different from FTS to support owning both. I like that it is at 2019 levels, and think there is a good possibility it may reward a patient investor. Is debt a concern?

Which course of action would 5i recommend, and why?
1. Sell BEP at a tax loss and split the funds between BIP, CPX and FTS; or
2. Sell BIP at a tax loss and repurchase AQN,
3. Or is there another course of action that you'd recommend?

Thanks!

Q: I am looking for the "safest" dividend paying stocks to add to the above list that will help me weather the recession that according to most commentators will last well into 2023.
5 each from the US and Canada will be of great help.
Many Thanks

Q: I'm thinking of replacing AQN (held in USD non-registered account) with AQNU to harvest a tax loss. Would this pass CRA rules?
Thanks
Peter

Q: I am trying build a list of buy and forget core stocks for each sector. I hold the following utilities in various accounts: FTS, BIPC, BEPC, AQN, NEE, BLX, NPI. Can you please rank these for safety and also for growth. I hold BLX in a corp account because it has the lowest yield - do you see BLX as a long term buy and forget stock? Thanks.

Q: I own AQN in my dividend growth portfolio and would like to add another utility. Is Fortis to similar to AWN or different enough for a diversified portfolio. Also thining of Emera or perhaps ATCO for better diversification. Which of these or others would be your preference for another utility in a portfolio?

Q: Hello Peter
Out of the three stocks, AQN has the highest dividend; however, is this sustainable? From an overall safety with decent dividend, I was thinking of Fortis instead of BEP.UN. Any comments please?

Q: Please would you comment on the continuous downtrend of AQN stock ,(worse than other cdn utilities like FTS),and on the risk involved if I keep this stock long term for revenue ,regards JY

Q: Good morning,

I'm aware of the outlook being more income oriented then growth with this company.

Are we nearing over sold here? With this value contraction and a medium term outlook.

Thank you very much.

Q: Clarification please on the Sept 19 question on "valuation" of these 3. It was stated "AQN's valuation at 12.4x (ACOX at 8.3x and CPX at 7.6x)"

What measure do these numbers refer to and are they forward or TTM?

Q: Hi, AQN stock has languished over past years and shares have been testing investors' patience. Even a recent large acquisition has failed to reignite the stock price. Based on your recent comments, you consider AQN fine for income but not much is expected in terms of capital appreciation. For a quick comparison of share price performance, I pulled the charts of these four utilities over 12 months and noted that while CPX and ACO.X outperformed by a wide margin, AQN was a complete laggard with FTS in the middle of the pack. We are retired investors and looking for ( In Non Regd account ) stability of income ( with increasing dividends) and some growth potential. We have owned FTS and AQN for many years, but are considering to switch out of AQN ( fully or partially ) to CPX or ACO.X. What are your thoughts about this plan and how are the current valuations of CPX and ACO.X for the switch ? How would you rate these four companies, in order of preference ? Thank You

Q: How much growth do you see in this company over the next five years and would you consider it to be able to generate a decent level of capital appreciation.

Q: Hi 5i team.
about 6 weeks ago sold AQN for a tax loss and increased position in FTS and bought some BEPC on top of BEP.UN as I am thinking of switching to BEPC to make life less complicated tax wise.
Problem (and a good one to have) is that I have a large capital gain in BEP.un.

Utilities portions as total of all portfolio.
BEP.UN is about 2%
BEPC about 1%
Fortis about 2%
Polaris about 1%

Question is what to sell or reduce to add in AQN back at about 2%?
Would you suggest a different mix?
I like the dividends and am OK w slow to moderate growth - retiree and looking at conservative ongoing investment. (I like all of these stocks.)

I am willing to pay some taxes as I worry about the capital gains tax rate rising at some point under our current government.
Subtract as many questions as needed.
Thank you.

Q: I have an account where income and safety of capital are the primary objectives, though a bit of growth is also helpful. I presently have Capital Power which has done well in recent months. Since it has been somewhat flat during the same period, I wonder if a switch to Algonquin offers a chance to have the same primary objectives but a bit more opportunity for some appreciation. If it were you, would you make that change, and why or why not? Thank you for your excellent service.

Q: Hi, This week's sharp decline in Pipeline ( ENB/TRP and Others) and Utility (FTS etc ) stocks - Do you think, it is a result of market's renewed fear of continued rate hikes into 2022/2023, as suggested by FED Chair on Friday and re-iterated by other FED Presidents over course of this week including Cleveland FED President, Mester, Today. Pipelines and Utilies sector has performed well this year, but may be, due to its higher yield, is causing some worry to investors. Your comments, co relation of high rates and other factors, impacting these sectors will be much appreciated. Would it be prudent to underweight the sectors, in near term. Thank You

Q: Hi, How would you rate these companies for Utility/Renewable Power sector ? Northland Power has received a lot of attention recently from investors and analyst community and stock has made a good move. Do you rate this company as an attractive investment in this sector ? Will NPI be a good complement to add to an investment portfolio, with FTS and AQN already owned ? If so, what would be a decent entry level ? Thanks

Q: I had inadvertently marked the following question 'private' and am now sharing it, along with your response. I also have a follow up question: please rate ENB and AQN on a scale of 1-10 for both growth and safety over the next couple of years. Thank you.

Wanting to dip my toe back into the market with a 2.6% total portfolio investment. My goal is to purchase stock in a Canadian company with a dividend >2%, that is anticipated to experience strong growth in the next 2 years and is not particularly volatile. Please rank the following on a scale of 1-10 for both growth and safety: MG, SLF, TCN, LNF, and IIP.UN. Other than GSY, X, BEP and BIP (already held) are there any other Canadian companies you would recommend that would meet my criteria? Thank you.



Asked by Maureen on August 17, 2022
5I RESEARCH ANSWER:
For growth: MG 6; SLF 4; TCN 7; LNF 5; IIP.UN 4

For safety: MG 7, SLF 8, TCN 4, LNF 6, IIP.UN 7

We might add ENB, AQN, X to this list.

Q: Hi, What are your thoughts on AQN results ? Stock performance has been frustrating compared to the sector and its peers for several years. Though , there has been a bit of strength over past few weeks, does it look like, it's sustainable and stock could go back up to $20-22 level, over 12-24 months ? Thanks

Q: May I please have your opinion on AQN's Q2?
With appreciation,
Ed

Q: Hi Folks,
I currently hold FTS and AQN in my non registered account. I would like to add one more utility company, I am looking at BIPC and BEPC - which one would you recommend at this time. Appreciate your comments.
Thanks

Q: Good afternoon,

I'd like to add a position (or 2) in each of the following sectors: REIT (TCN or GRT.UN or CAR.UN or a better idea), energy (CNQ or SU or a better idea) and industrial (already own WSP, TFII, XYL, TT and could add to one of these or consider a better idea). I could also use a utility suggestion (either add to FTS or AQN or add BEP.UN). And, I'm always looking for an opportunity to add BAM.A to my portfolio. In what order would you add or take new positions given the current environment being favourable to a given sector and/or a good entry point for a particular stock.

Your service is always greatly appreciated, thank you,

Lisa