Investment Q&A

Q: Do you foresee that BEP, VNR, AQN or RNW would be impacted by a US BAT tax? Thanks.

Q: I bought a bunch of Algonquin Power last year. love the 5% dividend. your thoughts going forward?

Q: I am retired and use the revenue from my RRIF to fund my retirement. I am overweight in financials and energy.I need to add to utilities as I only have 1 stock KWH.UN. I am considering FTS, AQN and BEP.UN. Would like to add 2 from this list. Appreciate your thoughts.

W

Q: Hi team
I have a full position on FTS
and a 3/4 position in ema
I would like to add more to my utilities for dividend and
a slow growth purpose
would you recommend ema, aqn and cu, which one is safe
and which one has the potential for higher capital gains ?
thanks
Michael

Q: I have been a holder of AQN for a fair while and have been very satisfied and even have added to the position on dips. I notice that the "short" position of this stock was increased by 51% as at Jan31/17. I don't usually become concerned by changes in short positons however this increase is considerable. Should I view this as a concern by the so-called better informed?

Q: I am looking to add renewable energy companies to both my US and Canadian portfolios. Buy and hold for 5-10-20 years. Can you make some reccomendations?

Q: Good Morning
I currently have a 3% holding of AQN and 2% Rnw. Would you recommend increasing AQN by reducing RNW? If yes by what %? My Utility portfolio is 8-9%.

Thanks Team

Q: Currently I have AQN in a registered account which is about $4.12% of my portfolio in Utilities. I would like to add FTS for another 4%. I have 16% in energy. Does this sound reasonable?

Q: When analyzing Canadian stocks with considerable exposure to the US, how much of the stock appreciation in the last 5 years would be attributable to the declining Canadian dollar, and more importantly, would a rising Canadian dollar have the reverse effect? Would the effect be different for a utility like AQN with large capital investment, as opposed to a services company like TD? Would management participate in hedging strategies to limit any negative effect on stock price?

Q: Hello Peter, Should have sold DH Corp sooner but will take a loss and deploy the cash to these three companies also some to TIO networks. Do these choices sound suitable to you? Herb

Q: Algonquing Power (AQN) is considered a renewable energy company, but it has sizable natural gas operations through its Liberty Utilities division. Natural gas is obviously not a renewable resource. How does AQN get grouped into the renewable energy sector? Is this justified?
Speaking of which, what is your favourite company in the renewable energy space? BEP.un or another one? Thanks in advance.

Q: I was contemplating purchasing shares of AQN until I saw a January 6, 2017 report by S&P Capital IQ that rates the company a "Strong Sell". This appears to fly in the face of the "Buy" rating by a number of other analysts. Is one negative report enough to give you pause?

Q: hello 5i:
could you please comment on the debenture issued today by Algonquin? Good investment on the income side of a portfolio? Do you have a "favorite" or favorites in this space, as you do with stocks?
eg. you have said PBH is one of your "favorite" stocks.

Q: i am concerned that owning pipes and parkland (which I do, for income) is going against growing headwinds, and there is a growing international trend toward cleaner energy, renewable energy, etc. I don't think I need dump all of these now, but at some point, don't you think we should be lightening up. Or is it such a longterm issue I need not worry about it. i want to be ahead of the curve.

If you agree, then what would you recommend instead for income, in the areas of clean energy and renewables?

Q: In pursuing my goal to maintain a well-diversified portfolio, I am trying to decide how and even why to differentiate between pipelines and utilities. Both sectors operate in regulated sectors (at least in Canada), both sectors will be adversely affected by higher interest rates due to debt levels and both sectors generally pay reasonably attractive dividends. As for their differences, I see utilities potentially performing better as the economy improves and the pipelines more affected by politics.

Should these sectors be treated as different when composing a portfolio or can companies be "mixed and matched" under a more generic "regulated" or quasi "fixed income" part of the portfolio and thereby treated as almost the same?

If your answer is "yes" would you endorse a switch from IPL to AQN for better long term growth with less volatility? (taxes not an issue)

Appreciate your insight.

Paul F.

Q: What are your thoughts about AQN as a stock. I'm thinking of adding it to my TFSA. I already own FTS, CU and BEP.UN, although they are in my RRIF account. I am currently retired and looking for income. Is there a maximum percent you would recommend for utility stocks?

Q: WORKING ON GETTING THE SECTORS BALANCED--HAVE 3 UTILITIES AND ONLY ONE TEL COM--WANT TO ADD SEVERAL THOUSAND TO EACH SECTOR---WHAT DO YOU SUGGEST?
THANKS AND HAPPY NEW YEAR

Q: With interest rates rising (in the US) the ongoing babble from so many 'experts' has been to stay away from 'bond proxies', namely utilities, telcos, pipelines, etc. However, those stocks have been performing quite well since the fed raised rates. Today Desjardins came out with top picks for 2017 (in the G&M which suggested Algonquin's forecasted returns would grow by 39% next year and Fortis by 17%. Do you think they're being too optimistic? And are these forecasted results already baked into the stock prices?

Q: Hi Peter and Team,

I find that we need to buy some more in the Utilities sector, to keep to a 10% weighting. We presently have about a three-quarter position in each of AQN, BEP.UN, and FTS. Do you think that INE would be a good addition to this mix or is it too similar to AQN and BEP.UN? We can buy and sell XUT commission-free, but I notice that ZUT (not commission-free) has a better chart. Should I increase our positions in each of the three we already have, buy a new one, or top up with XUT/ZUT? Or is there a US ETF in this sector that looks compelling? Or perhaps in the present "climate", could the utilities sector weighting be reduced below 10%? What sector should take up the slack?

Thanks for all your great advice which has been and continues to be very valuable. A Merry Christmas and Happy New Year to all of you at 5i and the members as well.

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