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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: Hi Peter, Ryan, and Team,

Your last answer to a 5i member (Peter) regarding the sustainability of AQN’s dividend is more positive than David Berman’s piece in today’s Globe & Mail.

In light of his article, where he repeated a comment by a Scotiabank analyst: “We have taken all dividend growth out of our model and, even still, the payout ratio remains 103 per cent of earnings per share in 2023 and 97 per cent in 2024,” Robert Hope, an analyst at Bank of Nova Scotia, said in a note.

Algonquin’s management said last week that it was targeting a dividend payout ratio of 80 per cent to 90 per cent, meaning that the company expects to distribute no more than 90 per cent of its profits as dividends over the longer term.

“This payout ratio target would be above its peers and, in general, makes growing the business without external equity more difficult. If the company does pursue a full reset, we could see a reduction in the dividend,” Mr. Hope said.

Is 5i still of the opinion that the dividend won’t be cut? My feeling is that if in fact the dividend is cut, the stock will decline even further, and as always, welcome your thoughts.
Read Answer Asked by Jerry on November 15, 2022
Q: After seeing my bond etc holdings loosing value at every rate increase, I am considering buying some higher yielding individual bonds to hold to maturity. My trading account has available bonds issued by these two companies. Around 30 months duration and about 6% yield, including capital gains, as they are available at discount to par. would they make sense as a 1- 2% part of portfolio of retired 60 year old? How risky are these companies? Brookfield PTY,Callaway REIT,Ford Credit
Read Answer Asked by Carl on November 15, 2022
Q: Sold half my position in VET in the mid $33 back in summer and I wish I would have sold the whole part. Looked at VET's Q3 report and it seems that it is the threat of a European "excess profit tax" that has pummeled the stock lately and I understand why and think the sell down is warranted. But the way I understand it there could be a unseen upside in VET in Q1 of 2023 when the VET's purchase of Shell's portion of the Corrib gas plant is completed. According to VET all of the 2022 Cash flow from Corrib should go to VET. When that cash flow is added to VET's income statement could they restate their 2022 earnings to the upside? I am not sure how this works but it seems to me that there is some 'hidden' earnings in VET that can not be realized until the sale of Shell's position to VET is officially completed. One thing we know is that Corrib definitely made money in 2022. Could the increased earnings from Corrib be enough to counter the Euroean excess profit tax. Long question and I hope you understand what I am trying to get at.
Read Answer Asked by Paul on November 15, 2022
Q: New Tax Formula forETFs.?
Have tou seen this?
Looks like a good reason to only buy ETFs in registered accounts,
Just to avoid the tax calculations nightmare,
https://www.advisor.ca/news/etfs/new-taxation-formula-for-etfs-to-take-effect-this-year
Read Answer Asked by Madeline on November 15, 2022
Q: Hi,
Best tax loss proxies for these four names? Also is there a $ limit to what you should sell for tax loss purposes because its a guarantee. For example, I'm down 15% on KEL but its only a small position. The $ value is only down $2k. So whether the $ loss value is small or not ($2k vs $10k), is it still better off to sell it for the tax loss every year end and move into a proxy name such as TVE? Or is it better just to hold? Thanks!
Read Answer Asked by Keith on November 15, 2022
Q: Hi team ,
Gsy is falling today. Earnings seemed good last week and I am seeing price target upgrades. I would of expected some strength here instead of sell off. Any reason for the negativity today? Should we be buying into weakness here ? Seems this company continues to be under appreciated and perhaps still relatively under owned. Would you agree this set up makes for great long term buying opp ? Buffett style focusing on fundamentals instead of market negativity? Thanks
Read Answer Asked by Shane on November 15, 2022
Q: I wish to add more energy stocks to my portfolio for diversification. I have ENB and SU. I am thinking of adding GXE, PXT & TOU, all three seem to have very low or no debt, and either PPL or TRP. All for a 5-year hold. I do enjoy the high dividend yield but would still wish to have some growth and safety. Please feel free to add or remove any from my list of your choice, rank them from the best to the least, and each with a reasonable entry price. How long of a time frame would you recommend to spread over the additions?

Thank you again for your insight.
Roger
Read Answer Asked by Roger on November 15, 2022
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