Richards Packaging Income Fund (RPI.UN-T)

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Earnings beat estimates across the board. Covid related products unwinding lead to revenues falling 11%. Their acquisition has weighed on cash flow as well. It is currently consolidating and finding a base. Unlock Premium - Try 5i Free

One of the least celebrated but one of the most important businesses in Canada because it is the largest packaging company. Trade at an attractive multiple. The payout ratio is almost 60%.

A very steady packaging and distribution business. The payout ratio is lower than 50% and they have targeted higher than that. There should not be much impact from the NAFTA negotiations.

This is the kind of business that investors should own in this time in the market. It pays a nice dividend. It is nicely diversified in terms of the types of packaging. Products are well-suited to consumer staples, which aren’t as sensitive to the market cycle. Management owns a large stake in the company. He think it is a good long-term hold.

He likes this. In the consumer staples space, so it is a stable type of company and you can expect it to grow with GDP. His main concern is liquidity. It can be illiquid at times and you need to be careful of your position sizing. Prefers CCL Industries (CCL.B-T), but if it is income you are looking for, this one is fine.

(Top Pick May 18/17, Down 3.63%) The decline is just trading noise. He still likes the company. He would hold it for sure.

(Top Pick Feb 28/17, Up 25%) It is still not overvalued. They generate a lot of cash flow and you get a 4.5% dividend which represents about a 50% payout. They have a huge runway to make acquisitions in North America. It is still one of his favourite names.

Glass and plastic packaging. Does a lot of pharmaceutical type packaging. This has had 13 years of 25%+ return on invested capital. A really strong balance sheet.

A very stable stock. Distributes rigid packaging products. They have 3 main end markets; food packaging, cosmetics and healthcare like pill bottles. Very stable. They generate a ton of free cash flow. 10% free cash flow yield and are paying out only half of that as a dividend. Dividend yield of 4.64%.