Question about Algonquin

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Hi Guys:

Thank you for the input on Algonquin.  Do you think it’s better to buy the preferred shares or the stock.  The preferred AQNA has a 6.5@ yield and I was just wondering what your position was on these two choices.  It looks like a great company!

Thanks so much!!

Daisy

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Asked on June 29, 2020 10:37 am
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Hi Daisy,

Just following up on this as well - preferred shares usually have a reset rate. So at a certain time in the future, the rate they pay will be reset to a certain percentage above the Canadian bond yield. Given rates are so low, the resets are likely to be lower than the yields currently offered. This is why preferred shares are underperforming common shares in the current environment.

Preferred shares are also illiquid and not well understood. Given this we focus on common shares.

Mat

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Posted by Mathieu Litalien
Answered on June 30, 2020 5:10 am
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Hey Daisy. We don't really buy the preferred shares of many companies, especially with interest rates this low.

When we highlight a stock like this, it will always be for common shares.

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Posted by Dan Kent
Answered on June 29, 2020 7:18 pm
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