BNN - Friday, May 24, 2024 - 12:00 p.m. (ET) - Segment #2

so we like the business on a long-term basis. It's come off pretty dramatically here. Oil prices have also softened. That's part of it. And their business is becoming lumpier because they acquired some more assets in the united states which has bigger well pads that take longer to drill and then they come on flush and then they decline. So there is more lumpiness to the production profile. We think you will be able to to put away a nice dividend yield on thissing on a long-term basis and have exposure to commodity prices without the capital risk. So have we like that on a long-term basis and we continue to tone. >> Andrew: did the caller refer to the covered call utilities? >> It was. Zwu. Okay. I guess it's kind of apples and oranges. >> I forgot that's the covered call one. So covered call again those ETFs they play games with them in terms of the yield. It's not actually always just the income they are earning on the underlying investments. Sometimes they will give you back return of capital to make the yield look higher to entice you to buy it. Yeah, I would say that those yields are apples and oranges. >> Andrew: okay. We will take a quick break and when we come back ryan bushell is our guest and he is taking your questions on canadian dividend stocks. [ ] it's spring time in paris and the kings and queens of clay have come out to play Tennis played on another planet That is a piece of art right there Ooo lala! Roland garros on tsn and tsn+ We all strive for peace of mind, whether in life or our investments. But that's not easy with today's market complexity. For over two decades, Goodreid has helped Canadians from coast to coast to achieve their financial goals, through both good times and bad. Working with our portfolio managers, you can navigate tomorrow's financial uncertainty with confidence. It's time. Take control of your wealth. I'm Gordon Reid. Invest with confidence, invest with peace of mind. To learn more,visit Goodreid.com. Harvest Equal Weight Global Utilities Enhanced Income etf. The world's top utility companies in one etf, global Utilities and steady monthly income. Harvest ETFs, income happens here. Gold, Gold, Gold, Gold, Gold, Gold, Gold, Gold, Gold, Gold, Gold, Gold, Gold, Gold, Gold, Gold, Gold, Gold, Gold, Gold, I got to gold. Closed captioning of this bnn Bloomberg Program is brought to you by Scotia iTRADE. Everything you need to direct invest. Scotia iTRADE. It's every investor's dream. >> Andrew: elliott is on the line from hamilton, ontario. Go ahead, elliott. >> Caller: good afternoon, yes. Please, pizza pizza royalty trust. What is the dividend? At what rate are they increasing it? And please, the name kind of confuses me. Royalty trust. Is this a corporation that pays a dividend or is it an old-fashioned income trust with distributions? I was just wondering what happens at tax time. Your comments, please. >> So I believe it's converted back to a corporation. It used to be an income trust. They kept the name. >> Andrew: excuse me. Yeah, they are calling it pizza pizza royalty corporation. Okay. >> Converted back to a corp.

>>> The dividend's fairly high. Andy can refresh the exact number for me but these are companies we are looking at but not buying quite yet. You see there came off last october. Bit of a recovery. Has come off again. We are concerned about the consumer. Every piece of of data you look at is lower spending, canadian retail sales came out they were pretty darned soft. So especially the canadian restaurant providers we are looking at just on that basis. So we will see if we get some real pain, there some real bargains. On the longer term chart it's not quite in five-year low territory. And there is some levers they can pull. If you look at how well dominos has been run in the united states pizza pizza not quite as well run up a brand but has some opportunity you would think to pull some of those levers and they have been doing some things that are working. Something on our radar but not quite at the present time. >> Andrew: okay yeah, the yield is about 7%. That's what I am showing on it. >>> Joe in montreal, go ahead, please. >> Caller: thank you, andy. I want to ask ryan about bce versus td bank. I had them both in my cash portfolio for their dividends. I know they are both beaten down for different reasons but would ryan comment on whether it would be a good or bad idea to add to these two positions for a retired person's portfolio. Thank you. >> Andrew: thank you. >> Yeah, so we are happily adding to bce right now. And we are waiting on td. So we own them both. Td is reason to believe that the worst is being priced in. Everybody is saying it's like wells fargo. Well, wells fargo was almost a pure retail bank and it's only a smaller portion of td. With the governmental involvement the regulator you just don't know how hard they will come down on them and there is definitely some headline risk there. So we are being parent on td. >>> On bce we think that the concerns are overblown. So basically there is a narrative that bce is borrowing to pay their dividend. If I draw you a chart of sources and uses of cash they have sources of cash which is borrowing and earnings. And they have uses of cash which is dividend and capital expenditure and operating expenses. And so there is a good reason why would you borrow to pay for the capital expenditures but people flip that and they say well, the capital expenditures are paid out of earnings and you are borrowing to pay the dividend. So if you want to make a narrative that's fine. But what they are building is a 50 year plus asset. They are building a fiberoptic network in the gta if all this news on data centres there is more data flowing through pipes. There is going to be more data flowing through pipes. These are the pipes that the data flows through. The company is maybe a little overlevered and probably should increase its dividend growth rate to earn out of this issue they are having now do I not think that the borrowing to pay for 50 year asset is unreasonable. And so at these levels with a 7 plus percent dividend yield I think it's nearly 8 actually, you know we think on a long-term base you will be knockback. There are still -- bce. There are still risks it. Shouldn't be a hundred per cent of your portfolio but at these levels it's a decent risk-reward. >> Andrew: bce is the parent of course of bnn bloomberg.

>>> We have an email from andrew in mississauga, ontario. Your opinion on keyera for the next two years. >> For the next two years. Well, I think the next two years will be pretty good for key era and all infrastructure providers that are feeding into canadian exportive energy. So we are seeing two major projects completed, lng canada in the coming kind of six to nine months as well as transmountain which is just coming into operation as we speak. And so keyera we don't own keyera. We own other companies in the states which we will talk about later are feeding into that network of volume growth within the basin and for the first time in well over a decade I think closer to two decades we are having major capacity expansion coming on for egress meaning transportation out of canada for energy. And so all these companies that like keyera that are getting paid for processing ore volume we think the environment is pretty bright for them so we are happily owning and adding at these levels. Keyera is not a company we own like I said but it's definitely in that basket and done well as well so we like all of them. >> Andrew: andré in chilliwack, bc. Go ahead, please. >> Caller: okay, andrew, happy friday morning to you. Thank you. Ryan, I could get your thoughts, please, on enbridge. I would like to hold it for long-term. I am approaching retirement age. Would be obviously a dividend investment for my retirement. Could you let me know also how long it takes with the dividend to approximately pay back all the shares and then have the dividend just come to me? Thanks very much. Good weekend to both of you. >> Andrew: thank you. >> It will take a while. I think it's probably -- it's not as long as you think, though. Enbridge, is it 4? >> Andrew: I think it's a bit higher but give me a second, okay. The dividend yield on enbridge. >> About 7 1/2% yield on 50 bucks. >> Andrew: I see. The yield. I thought you meant the yield. >> The actual -- yes. >> Andrew: it's 7.38% is the yield anyway. >> So anyways, it will take you somewhere in the neighbourhood of 20 to 25 years to totally recoup your investment your dividend with enbridge. Staple story with bce is on enbridge five or six years ago when they were building the line three expansion was coming online. They were again 50 year plus asset. They are borrowing to pay their dividend. Again they were bore hoeing to fund the capex an asset that is going to provide cash flow for decades for them and that is reason. They never cut the dividend. The dividend has continued to grow every single year from that period to today. And we think the future for enbridge looks pretty good. I was a bit perturbed. Rebecca will tell you the same of the dominion utility acquisition they did earlier this year. Again enbridge is a great owner of assets but do they need snore the way they are restructuring the portfolio I kind of like what they are doing and you can tell the market likes it, too. It came off in the last few days because they announced at the market equity issuance so it got knocked from 52 bucks back towards 50. On a long-term basis again these are irreplicable that we like for clients. >> Andrew: are you being a bit pessimistic there in the sense that. I may have misheard you on the dividend. It's a 7% yield. So that's -- 7% is 14th of 100. Maybe take you 14 years? >> Yeah, I guess so it. Depends what you paid for the shares. That's right. >> Andrew: okay. >> On my part bad. >> Andrew: I might have got it wrong.

>>> Fred in toronto, gorkss we are getting a lot of these energy services, midstream companies. Fred, go ahead, please. >> Caller: I am in edmonton. >> Andrew: oh, go ahead, fred, sorry. >> Caller: yeah, I have a question about tc energy. I put the same question to christine poole about ten months ago and she didn't really have an answer so I know you nol it so you can shed some light on it. When barack obama vetoed the line when trump got in he reversed the decision dropped the lawsuit which they did. As we know they never got approval and then joe biden got in he vetoed it again. I remember hearing at the time that they were planning to relaunch the lawsuit but that was over three years ago and I haven't heard a thing about it since so the question is this: is there an ongoing lawsuit and if there is what do you think of the chances of compensation and I'll hang up and listen. >> Thanks. So I actually did see this comment recently. So there is an ongoing lawsuit. It's with -- we were talking about this -- I was talking about this with someone the other day that the rulings in the united states in terms of the different court and the different levels are getting more and more disparate meaning more and more different. You are seeing -- I was with an insurance person I was talking about. He does large corporate insurance for a large insurance company I won't name it but and he is saying you know the settlements are all over the place. One judge can proulx this and another judge can rule that. It's for shock value or what have you. Given the political environment in the united states right now there is being drag, drag, dragged, right. So we will see how long it takes. -- can rule. Given what's happened. Given the fractures that the pipeline was approved then it wasn't approved. Then it was approved again. Then it wasn't approved again. I would think tc is sunbathessed to something. How large it is and if entitled to something. It is ongoing. And yeah, it's not something that gets a lot of news because nobody wants to hear about tc energy's problems. But to me again I think that they were done wrong but the regulatory system down there and some engines and reasonable. >> Andrew: I am looking at some research from boston university here that indicates that keystone is suing the U.S. government for $15 billion U.S. but I am not sure if that has been dated. It seems to be a parallel recent -- >> That's accurate. That was the cost estimate. And damages obviously. Again r they going to get 15 billion? Probably not. We will see what happens. >> Andrew: right. Okay.

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