Investment Q&A

Q: Sector Rec Now
Csmr Staples 10 8.4 (LIQ ECI PBH)
Csmr Discret 10 17.8 (GSY NFI ZZZ TOY FRII)
REITs 05 2.8 (BAM.A)
Technology 15 15.3
Financial 15 11.8 (TD NA AGF.B TSU)
Utilities 10 7.1 (FTS KWH.UN)
Industrial 10 12.0
Health 05 5.0
Energy 10 6.8 (PKI ZCL)
Basic Mtrl 05 6.7
Telco 05 0.0
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ETFs (VE VEE VGG) 6.0

Examined my portfolio in relation to recommended Sector weightings. Need to trim back Consumer Discretionary. I like them all; they have done well, except for FRII. I’d like to increase the holdings for Staples, REITs, Util, Energy and Telco. Could you please suggest an equity I might add for each of these five categories? Many thanks.

Q: Hi. I have a overweight position in BCE which I have a 3% profit plus dividends over the last year. I'm looking to sell half the position to try to get a bit more growth in the next year, while still maintaining a good dividend. Can you suggest a couple names in a sector with a bit more momentum. I already have a lot of financials. Was thinking Chartwell?

Q: I am in my late 30's, and I have a long-term time horizon. However, I find myself gravitating towards stocks with stable businesses that pay dividends. I currently own BEP.un, NWH.un, CSH.un, and SLF.
For a long-term, yet somewhat conservative investor, what are some companies that I should consider adding to my portfolio? Thanks in advance!

Q: I bought CSH.UN @ $11.60 in 2015, Sold @$14.20 in 2016 & repurchased this month @$15. What is the pay out ratio for CSH.UN? Morning Star shows a pay out ratio of 615%. Is this possible and if it is true should investors be worried. I bought CSH.UN for income. What is your opinion? Is there a better site to look up pay out ratio for stocks? Thanks for this great site.

Q: I'm 47 and have a balanced portfolio. My 30 days has passed on CRH Medical capital loss - so I could buy it back. I currently hold SIS and GUD in healthcare - while holding CSH as real estate/healthcare. Healthcare represents 8% of my portfolio while real estate represents 3% with REITS such as CAR.UN CSH.UN HR.UN and small REI.UN. Should I relook at CRH or add another like SIA? COV is a little small for me, but looks interesting. I can wait until after October 25th to see how CRH reports.

Q: As a follow up question to that asked by Mary Ann about the ten "forever" stock ideas. You indicated a few names could be added to the list and I was interested if you could provide a few of the names you think could be added.

Q: Hi 5i team, I'm looking to add one more name in the real estate sector. I currently have BTB Reit, Artis Reit and the etf XRE. Could you please suggest a few ideas. What are your favourite reits at this time and would you replace any of my current holdings? Thanks. Mario.

Q: I have US$ in a US account and I am looking for how to best allocate the money. I am a little light in industrials, but was thinking about adding NFI and CAE in CAD accounts, or is there a better US company to add to my portfolio.

Other options are:

Healthcare I have about 5% in GUD and CSH, but I could add a US company or ETF

Or just keep it simple and add IWO.

As always thanks for the guidance.

Q: In these times of rising interest rates, I am wondering if it is better to own rate reset prefs or perpetuals? Also are all REITs better on the back burner for now, or are there some that still look attractive?
Thanks

Q: 12:32 PM 9/11/2017
Hello 5i
Thank you for your answer to my question this morning about selecting companies with the highest probability of reliable long term income and dividend growth.

Just to follow up, if I am reading between the lines correctly I infer you would clearly choose banks if we didn't already own some. But since we do your suggestion is to buy CSH.UN and NWC.

I am fine with your suggestion but did you make it basically just to provide "diversification" at the cost of buying much much smaller and possibly less stable companies or would it be just as safe to simply overweight on Canadian banks.

Do you really think CSH.UN and NWC are as "safe" as RY and TD? After all if banks go down, so goes everything else. Just how "dangerous" is it to have a 20+% position in the big 5 banks?

Thank you............. Paul K

Q: 9:57 AM 9/10/2017
Hello Peter :
My wife and I are in our 70's and require additional steady dividend income to complement our pensions and bond income. We wish to choose companies that we never need to consider selling and that have reliable dividend growth and little chance of dividend cuts.
We have a 4.5% cash position we want to invest.
We need to decide between two options:
1. Invest the whole 4.5% in RY or TD, [we already own 10% split between BNS and CM], or
2. Add to 2 or more of these existing positions : CSH.UN [3.2%], SIA [3.9%], NWC [2.2%], CSW.A [3.1%], RPI.UN [1.0%], or invest part in new positions in one or more of ET, ZCL, ABT, or ADN.
What choice or choices would you advise us to make for the highest probability of reliable long term income and dividend growth?
Thank you............. Paul K

Q: I have BNS, RY, SLF and FSZ in equal amounts in my "Financial" basket and need to add another name to get my financials weighting to 15%. Can you suggest a new stock and/or a etf (CDN or US stock / etf) to compliment my current holdings OR would you just add to the 4 stocks that I have? Thanks

Q: I like its business-operator of senior residences- as the very wealthy group,the babyboomers are getting older & will likely use this services.However I am held back by the following.A very high P/E 145.4(trailing) & 163.4(F)per TRI.It missed expected eps 3 of the last 4Qs.Its 3.9% yield is relatively low in the sector.Underperformed TSX the last year.Reached a $16.50high in early June/17 & been in a decline since.Canada has a strong GDP leading to expectations of an imminent increase in interest rate which will be negative for proxy bond sectors including CSH.Your view please.Thanks for u normal great services & advices.

Q: As a new member of 5i Research, I first want to thank you for the service you provide. Fantastic.

I am reviewing the Canadian portion of my RRSP, sector by sector. I have a balanced approach and 15+ years ahead of me before transferring to a RRIF.

I find myself a bit underweight and concentrated in Healthcare, owing only NHW.UN (4% of Canadian portfolio). I was thinking of switching half into CSH.UN for diversification within the Real Estate/Healthcare space, then add a 3% position in GUD for more growth. What are your thoughts?

Note: The US portion of my RRSP, which is half the size of my Canadian portfolio, is invested in Mutual funds with Healthcare/Big Pharma representing about 16% of my US holdings. So my strategy would bring Healthcare to 10% overall in my RRSP.

Thx.

Q: I am looking at adding CSH.UN to my income portfolio based on your recent addition. However, I note that it is down over 6% since being added to the 5i income portfolio last month.
You often respond that you like to invest in stocks with positive momentum vs negative. Following this advice, when/how would you recommend investing in CSH.UN, as it appears to have negative momentum?

Q: I presently have no healthcare or tech holdings in either my RRSP, TFSA or cash. Am retired,like dividends, but can take some risk.

Looking at having 10% in each sector with HHL (50%),CSH.UN (25%),GUD(25%)in healthcare and TXF(50%),ABT(25%)PHO(25%) in tech.

What do you think of this approach and the individual holdings?

Where would you put each one ( RRSP,TFSA cash)?

Thanks Derek

Q: I have a question about 988
Hi, my broker has advised to sell Csh.un,has anything changed or is it over valued?I bought at 11.60
Would you keep long term for a income investor,or is there a better stock for this sector?
Thanks for your advise.

Q: For long term income and some potential growth do you have a preference between Chesswood or Chartwell?

Q: 5i team :
I have some cash available (10% of portfolio) with the intention to have it ready if the market (TSX or S&P 500) go on a sharp downturn. Assuming that this does not happen what would be your recommendation for the safest of all stocks (or 2 or 3 of them) in case of a downturn in the markets. (I am asking for a yield of 2.5%) Most of the safe stocks tend to have high P/E ratios , which makes me think they will drop anyways. Thanks

Q: Hi team,
Following your lead and selling off ZRE for CSH.un. Is a TFSA the best account for a REIT to be held?
Thanks