Canadian Banc Corp T.BK

Oil and Canadian Banks

[deisman03]

Canadian banks are heavily invested in the "oil" industry, at all levels from exporation to site build up to operation, maintenance, clean up and selling the stock of the companies involved. 

When the oil patch isn't producing profitable results, the banks tend to lose their income revenue stream and it shows in their distributions as well as evaluations. 

It's IMHO that our present 15% distribution came about because of recent high oil prices and the maturity date of the trust coming to fruition, with a bundle of cash and assets that had to be trimmed before the trust terminated. 

Now that they've followed through with extending the longevity of the trust's expiry date, they may have to trim that 15% distribution back to 10% or even lower. 

Their only other option is to sell more units, which will increase the payouts and burn up cashflow even faster. 

If they aren't careful, this trust will start looking like a "ponzi scheme" and the SEC will be on them. 

That would be a worst case scenario but it's not impossible if the people managing this investment vehicle aren't watched very closely.

[EdPaquette]

Quadravest will not lower the dividends,  it will let the nav drop like all the others into "occasionally paying".  The SEC is a US thing.  Split funds are banned in the US.

[deisman03]

I realize that the SEC is a US regulator.  I just don't remember the name of the Canadian regulator.  You may be right but I don't agree with your assessment at this time.  They may follow your described procedure, which is already formulated and in place or if the price of the units stays low for to long, they will cut the distribution.  It's a good common

[BLOODTHIRSTY]

Go to the website and read "Objectives" Class A shares.

[SueBee2772]

Personally I don't think disaster will strike. This fund paid all but 1 dividend in 2020 when other split shares missed most of the year. At one point oil dropped to 0.  Throughout their history they have been a consistent payer. One thing I haven't seen anyone mention is the fact they get a lot of the money back from distributions through reinvestment. A lot of people buy more shares

[deisman03]

SueBee, DRIP=DILUTION and isn't revenue

[lsrasr]

I agree.  Excellent commentary.  If you look at an extended history of this fund over 10 to 15 years, it has outperformed almost all of the banks it invests in.  This is the safest of the split share funds.  The only split share fund I have invested in.

[marketsense]

I totally agree and have done so myself.  I keep adding to my stash for the income that it provides with absolutley no interest in selling or trading.  I keep adding on these selloffs and down days. I do agree about the drip but I suspect that has far less overall effect when one considers the safety and performance of the fund.  Another point is if I am any example,  I buy

[deisman03]

My comments were ''worst case scenarios'' which we should all be aware of.  BK buys most of the units that are accumulated in their DRIP from the open market, at market prices.  This cancels most of the disolution effect.  One thing that's come home to roost lately is that banks are not infallible to market fluctuations and stresses, especially in other

[deisman03]

TOP HOLDINGS VALUATION Holdings Sorted by weight as at May 31, 2023   Royal Bank of Canada Toronto-Dominion Bank National Bank of Canada Bank of Montreal Canadian Imperial Bank of Commerce Bank of Nova Scotia June 15, 2023     NAV Pre-Distribution:      $19.88 Distribution: