RE:RE:RE:RE:under 3.60 is just true gift in christmas.flamingogold wrote: When you factor in the withholding tax and the conversion, the rate is only slightly more than 5%. Hardly dishonest especially considering that I didn't come up with the 5% number in the first place, the other poster did. I simply referenced it as my post was more about his question on TFSA's and withholding tax, which I posted a link on for his reference.
You're right, due to its structure, HOT.UN probably shouldn't be held in a TFSA.
However, the distribution level shouldn't be judged based on a specific type of account. It's fine in a TFSA and in a margin account you can deduct the withholding tax on your tax income report.
All that said, I like their new distribution level. Imo, it is set at a point where they can be comfortable with it and can grow it down the road (which, imo, has more value than setting it high and keeping it there forever).
The stock is relatively cheap if you look at the market cap, the debt level and the value of their hotels on the market. If you had deep pockets and took your own money to purchase the same type of hotel with the same capital structure (debt/equity ratio), it would cost you more to generate the same annual return (accounting wise) as HOT.UN than to just buy their shares.