Investment Q&A

Q: Hi,
Inflation came in hot again today in the U.S. Do you guys have a view of the dot plot? Some economists see the Fed hiking rates 5-6 times this year with a 50 BPS thrown in for good measure. Others see a less aggressive FED with 3-4 rate hikes.

Also, the renewable energy names all seem to be making a nice bottom in the past month or so. Could they be signaling that the rate hikes may now be baked into these names?
Thanks again.

Q: Of these three, which do you prefer and why?

Q: Do you prefer BEP or NPI in the renewable space, are they at good entry points. What is your view on NFI and SunRun, again are they at good entry points?

Q: Hi Peter, Ryan, and Team,

Portfolio Analytics indicated that we had too much Technology, and not enough Utilities. I recently sold XIT, and added more BEP.UN. In the Utilities sector, among our accounts, we own AQN, BEP.UN, and FTS. The Utility weightings are now AQN = 3.65%, BEP.UN = 2.86%, and FTS = 1.49%.

In 5i's answers to questions, I notice that you generally rate BEP.UN higher than AQN.

Recently, John Heinzl wrote in his "Yield Hog" column that he bought more AQN, and gave some good reasons for doing so. I'm now wondering if I did the right thing in adding more BEP.UN, and am asking for some "reassurance".

Finally, I note that PA still shows that we could add more Utilities. I would be doing this in a non-registered account, and am wondering what to add. Please rank AQN, BEPC (better tax advantage than BEP.UN), FTS, and NPI (this would be a new holding).

Thanks in advance for your insight.

Q: With the expected increase in electricity needs from the world-wide introduction of electric vehicles, I would like to establish a full position in one or two of the above renewable power companies. Would you please rank them in terms of current valuation, debt, revenue growth and dividend growth. Which would be your overall preference for a 5-10 year hold? If you have another recommendation, what would it be?

That you for all the assistance you provide the DIY investor.

Don

Q: Renewable energy has been beaten up over the last year and seems to be fairly cheap at the moment. With quantitative tightening and raising interest rates on the horizon, would it be prudent to wait to see what happens with inflation before moving into this sector? Which of these names do you prefer? Thanks.

Q: Hi 5i Team,

I am looking to invest approx. $6k in my TFSA and approx. $28K in my RRSP for Jan/Feb of 2022. My potential stock picks for each account are:

TFSA - AT, TOI, CJT
RRSP - T, BEP.UN, BAMR, SJ

I am leaning more towards T & BEP.UN for my RRSP since I do not have much exposure to Utilities in my overall portfolio exposure (Tip my hat to your Potfolio Tracking for pointing that out!)

I am leaning towards adding to AT (I already own a significant amount of shares but I am extremely tempted by the current stock price) or CJT since I believe the potential ecommerce headwinds for the company will be significant over the next few years.

If you could rank or provide your thoughts on these companies in this current (depressing) market environment it would be of great help. If you have better candidates to look at that would also be welcome. Plan to hold for 5 to 10yrs.

I am new to this service but just wanted to say that I have been very impressed with 5i so far. I appreciate all the work you do for DIY investors and wish you and your staff a Merry Christmas and a better new year.

Thank you in advance.

Q: All the renewable stocks other than BEP.UN are getting beaten up today. Any news that I missed. Could it be Tax loss selling since the sector is one of the few that has done poorly this year?

Q: I'm down about 15% on BIP.UN and am thinking of a tax loss sale and purchasing either NPI or BLX; and then reentering BEP in January. I currently hold CPX and AQN.

A similar question had been asked previously in June, and 5i's recommendation was either NPI or BLX. Has anything changed with these companies since June? What would be your preference for a short term hold today and why?

Many thanks!

Q: Long time holder of NPI, wondering what your thoughts would be on a switch to BEP.UN. The fact it is one of the few stocks you have rated as an 'A' is a huge vote of confidence, as well as being a Brookfield company, more diversified, larger market cap, slightly higher yield.

Thanks in advance.

Q: The entire renewable sector was down substantially in 2021, from BEP.UN's drop of 38% YTD to RNW's 14%. When will this sector come back to life? If it does what is your estimated timing of the rebound and which stock in this group will recover the most? Thanks.

Q: Thank you for your response to my last question. As a follow-up, do the four utilities stocks that I currently own (BEP, FTS, AQN, NPI) offer adequate diversification within the sector? Just wondering if I should add to these (in the best to worst ranking you provided) or is there another utilities name (Cdn nor US) that you would add to be better diversified and if there is, would you sell one of my current 4 utility stocks or just add the other name?
Your insight much appreciated,
Doris

Q: Hi, I am looking to add to my utilities and currently have partial positions in BEP, FTS, AQN and NPI, none of which have moved much of late. I am looking at adding FLNC as a partial position thinking that it may have more growth potential.
1) Can I get your opinion of FLNC for long-term hold/moderate risk tolerance?
2) Can you rank the 4 stocks currently owned from best to worst, again with a long-term time frame/moderate risk?
Thank you as always for your insight.
Doris

Q: Here is the current EV/EBITDA ratios for the following energy producers (lowest to highest): CPX (8.3), BEP.UN (9.3), NPI (11.6), FTS (13.0), H (14.0), AQN (16.5), BLX (17.4), INE (37.1). CPX seems to be a top contender for value, with lowest P/B too at 1.49. Considering all factors, please rank from best to worst, in terms of possible best total return over the next 10 years.
Thanks!

Q: If you were to rate the above renewable energy stocks (including the ones you're aware of but not listed above) for yield+growth potential what would be your order of ranking? Thanks.

Q: For a longer term (5-10yr) dividend hold we currently own AQN and are wondering if adding or replacing it with another such as EMA, FTS or NPI is prudent given AQN's flaccid performance over the past 18 months.
Thank you for sharing your insight.

Q: Hello Peter,
Are there any issues with having BEP,UN in a TFSA? Is it similar to investing in any other dividend paying stocks in a TFSA ( in terms of receiving dividends ): there are no extra forms to fill out as it is a limited partnership.. Also, if the company is not profitable, what is the thesis of investing in it: great cash flow, part of BAM, and the right sector such as renewable energy. From a fundamental basis, is it better than investing in AQN or NPI?

Q: Dear 5i team.

I am considering a switch from CPX to NPI and wanted to know your views on these two matched head to head. Is there a better alternative to switch to in the same space?


Many thanks.

Q: I have held NPI in both registered and non-registered accounts for years. The stock price has more than tripled, so obviously I am happy with that, but I am now retired and invest mainly for dividends. NPI currently yields less than 3%, a bit low compared to some other power producers like EMA or CU (I already hold some CU but not EMA). NPI also seems to be struggling to get back to its past highs, and if it did then the yield percentage would be that much less. I am considering selling NPI in the registered account and replacing it with either EMA or CU (recognizing these 2 are not currently as strong in the renewable space).
Could you compare the dividend growth, dividend sustainability, debt levels and future stock growth potential of these 3 stocks, and comment on my plan.
Thank-you

Q: Of these 5 companies that have assets in the renewable energy space, how would you rank them for (a) dividend safety and (b) future growth prospects? Also, please provide the pay-out ratio for each.

Thanks!