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Investment Q&A

Not investment advice or solicitation to buy/sell securities. Do your own due diligence and/or consult an advisor.

Q: You rate this as an "A"; but, when I check my info provided by CIBC Investors Edge: debt/Equity is 2.8X, ROE is basically 0, P.R. is crazy high and P.E. equally so. They have issued a lot of common and preferred shares as well and must have a heck of a lot of non-cash write-offs which distort a lot of the metrics, I guess? What is the story on a pure cash basis then?
Read Answer Asked by James on June 29, 2016
Q: With a time horizon of 10+ years, i'm looking to start a smith-maneuver portfolio to write off some mortgage interest. Could you please recommend 5-10 top picks that would be suitable for this strategy? Or would you recommend possibly an etf like CPD for something like this.

Thanks!

ps, i tried searching for previous questions in the q&a regarding this topic but couldn't find any, do you know which section they would be filed under?
Read Answer Asked by dan on June 27, 2016
Q: Hi 5i,
Are you able to provide any more detail on the rumour that Brookfield Renewable Energy Partners (BEP.UN) might be interested in Transalta Renewables (RNW)? At the current share price, is there sufficient value for them to pay enough of a premium to have a chance at a successful bid and still stay within an earnings-accretive price range? Thanks!
Read Answer Asked by Lance on June 20, 2016
Q: I manage the investment accounts for a family member who currently has a very small pension, CPP and OAS with the OAS Supplement. Her Supplement is reduced by 50 cents for every dollar of investment income she makes so she is effectively in a 50% tax bracket. Her capital comes from the recent sale of her house and the money must be available for an assisted living facility in a few years. My problem has been finding stocks to preserve capital and minimize the 50% tax bite which impacts what she has to live on currently. I have used AV.UN which has no impact on her income now and TMC which does but provides a high income. I think capital gains would be better than dividends which are grossed up. Any suggestions for appropriate investments for a 6 figure account?
Read Answer Asked by Earl on June 08, 2016
Q: This question is about portfolio construction and geographical equity allocation. I am attempting to diversify my equity holdings across Canadian, U.S., International, and Emerging Markets.

How do I treat a company that has global operations, such as BEP.un?

BEP.un receives 25% of its revenue from Canada, 50% from the U.S., 5% from developed International markets, and 25% from Emerging Markets.

Should BEP.un "count" as a 100% Canadian holding because it trades on the TSX, or should I proportion my holding in BEP.un across the 4 geographical regions according to their respective revenue percentages? (Or is there an even better way to approach this?)

Thanks again for this great website and service!
Read Answer Asked by Jonathan on May 25, 2016
Q: hello 5i:
could you please comment (generally) on the new preferred shares being offered by BEP.UN. Can I purchase these through my online broker ie BMO Investorline or Scotia iTrade? How would these preferreds compare to others being offered at the moment? The reset, pegged to Canadian Treasuries seems like good protection for the investor: is it? Would these be acceptable as the fixed income portion of a diversified portfolio for someone who is (becoming) more risk averse? Held in a TFSA, is the interest taxable or not?
thanks
Paul L
Read Answer Asked by Paul on May 17, 2016
Q: To clarify an answer to an earlier question re: tax treatment of the distribution. You mentioned that distributions are not eligible for the dividend tax credit - which is not entirely correct. I have held a large position in BEP.UN for a few years. In 2015 58% of the distribution were eligible for the dividend tax credit. Another 28% of the distribution was a return of capital and only 14% of the distribution will be subject to the full tax rate. In 2014 29% of the distribution was taxed at the full rate. This of course will change from year to year. For historical taxation - have a look at their website which has a good breakdown of the tax treatment of all distributions. Hope this is helpful.
Read Answer Asked by Gary on April 26, 2016
Q: Followup to recent Q. on BEP.UN. Distributions can be taken in US or C$, default is US, so if held in a C$ account broker will convert at their exchange rate. To receive in C$ you must instruct broker you want this option, I estimate it's worth at least 1% of the distributions received, not much, but better in my pocket than broker's.

The above comment was posted and I am confused by it. What exactly would I tell my discount broker? Would it be better to get the distribution in US$? Would I need to move my shares to the US listing in order to get the distribution in $US or can I just request to be paid in $US even though the stock holding is on the TSX? Would this be a good way to increase US$ over time?

Thanks
Dolores
Read Answer Asked on April 26, 2016
Q: Hi, 5i.

For pure utilities, I have BEP (2.0%) and RNW (1.5%). I also have ENB (2.0%) and IPL (1.0%) if you consider those utilities.

I'm looking to increase my utilities allocation and wondering if I should add to what I have or take a position in Fortis (or another name you recommend).

Thank you,
Robert
Read Answer Asked by Robert on April 25, 2016
Q: Peter and team,

Is BEP.UN the "best" way to play our lovely politicians' relentless drive toward renewable energy? It seems the way that public policy and public opinion is going, people are going to move toward renewable power regardless of economics. Would BEP.UN continue to observe significant growth from this?

I am very scared to invest in any solar manufacturers or battery producers because they all seem so risky.

Thoughts?
Read Answer Asked by Marc on April 20, 2016
Q: Hello Peter & team, thank you for the improvements to your website. I really like to see the full company names rather than just the symbols. What would be the better choice between BIP.un or BEP.un for my RRSP? I am looking for safety and income. Regards, Gervais
Read Answer Asked by Gervais on April 15, 2016
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