Buy, Sell or Hold: BMO Covered Call Utilities ETF (ZWU-T)

TSE:ZWU

12.65

0.13 (1.04%) 1d

Showing 1 to 15 of 181 entries

BUY

Note that these aren't your typical utilities, but also pipelines like TransCanada, BCE and Verizon. Holds defensive, dividend players. Pays a 7.5% dividend yield. Holds safe, low-beta names. Likes it. It has performed well, down less than 1% YTD in today's market.

E.T.F.'s

BUY on WEAKNESS

Good for dividend portfolio? Love it. Don't own it right now to reduce exposure to energy and pipelines. 13 / 12.5 area really attractive. If you need the dividend, no reason to sell it now.

E.T.F.'s

BUY

Yield is really high, around 7%. Remember that, for utilities, because prices are regulated by government, they can't respond as well to rate increases, and so they tend to underperform markets. When you put a covered call overlay on them, it reduces the upside a bit, but half of it is not covered.

E.T.F.'s

COMMENT

Holds non-traditional utilities like Canadian pipelines, plus BCE and Telus, Verizon, US pipelines. Covered call can boost income up to 7% here. When markets move higher, covered calls lag. Does really well in a flattish market, compared to owning the underlying securities. Good for people who want income, not necessarily looking for the capital gain.

E.T.F.'s

BUY

A way to extract yield from the markets without too much risk. Has always recommended for income.

E.T.F.'s

BUY

Utilities, pipelines, telecoms. Very nice dividend of around 7.6% with the covered call. YTD, down only 1.24%, which is not bad. Good name for income, not a ton of capital appreciation.

E.T.F.'s

WAIT

Based on utilities. In a rising rate environment, because they're heavily regulated, they can't just go out and change rates on their own. So these could take a bit of a hit. You might want to wait a couple of weeks to see what the first real interest rate increases are going to be and buying it then. Yield is really good. In general, a good ETF.

E.T.F.'s

BUY on WEAKNESS

Has traditional utilities, pipeline and telcos. All good dividends with high covered call exposure with a yield of 7%. Would not add here. Wait until it comes down. Some interest rate sensitivity but a solid yielder. Have to be mindful of oil prices for the pipeline and interest rates.

E.T.F.'s

BUY on WEAKNESS

Trimmed it around $13. Loves it for the yield principles and stability over time. It is sensitive to interest rates and energy. These two are in play right now. Would trade around with it. If it dips, would add to it. At $13, it is richly valued. Need to know if you want to own it for distributions or to trade.

E.T.F.'s

DON'T BUY

it's underperformed the bank ETF since inception. So, the covered call isn't adding value, but rather generating fees.

E.T.F.'s

DON'T BUY

FSZ vs. ZWU Both pay around an 8% dividend, which at that level it's probably not pure dividend you're getting on a long-term basis. About 6.5% is the limit for a sustainable dividend level. Plus, you get worries about the future of hydrocarbon demand. He himself doesn't see this, but it's a scenario to consider. Both FSZ and ZWU, you're getting some of your capital back to fund their dividends--this is not sustainable. ZWU has underperformed the equal-weight bank ETF since inception. So, the covered call portion isn't adding value, but is an additional-fee generator. He's rather buy the underlying stocks. Fiera has done a ton of purchases, not all of them cheap or good. Their wealth management business has been positive in the last 18 months, but you risk a market correction and a major re-pricing of assets, more so than any Canadian bank.

E.T.F.'s

BUY

ZWU vs. ZWE Includes telecoms, pipelines, and electric companies as well as utilities. Good for conservative investor, who wants a nice yield of tax-efficient income. Very good yield about 7.5%. Longer term, you might have more growth in ZWE if you can look beyond the next 6-12 months.

E.T.F.'s

COMMENT

Caller had a question on tax treatment. About 30% of the dividend stream comes from US corporations. This would see withholding tax. The capital gains coming from the covered calls are cap gains, and the dividends from Canadian companies will see beneficial tax treatment and the US dividend will be taxed.

E.T.F.'s

DON'T BUY

For the long term The only problem is that utility stocks rely on government contracts, so are vulnerable to an increase in interest rates; they can't adjust quickly. So, if rates rise, utilities will decline even though the dividends now look attractive.

E.T.F.'s

BUY

He likes ZWU, a basket of telecoms and pipelines, where you get the high yield plus the covered call option premiums.

E.T.F.'s

Showing 1 to 15 of 181 entries

BMO Covered Call Utilities ETF(ZWU-T) Rating

Ranking : 5 out of 5

Bullish - Buy Signals / Votes : 12

Neutral - Hold Signals / Votes : 0

Bearish - Sell Signals / Votes : 3

Total Signals / Votes : 15

Stockchase rating for BMO Covered Call Utilities ETF is calculated according to the stock experts' signals. A high score means experts mostly recommend to buy the stock while a low score means experts mostly recommend to sell the stock.

BMO Covered Call Utilities ETF(ZWU-T) Frequently Asked Questions

What is BMO Covered Call Utilities ETF stock symbol?

BMO Covered Call Utilities ETF is a Canadian stock, trading under the symbol ZWU-T on the Toronto Stock Exchange (ZWU-CT). It is usually referred to as TSX:ZWU or ZWU-T

Is BMO Covered Call Utilities ETF a buy or a sell?

In the last year, 15 stock analysts published opinions about ZWU-T. 12 analysts recommended to BUY the stock. 3 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for BMO Covered Call Utilities ETF.

Is BMO Covered Call Utilities ETF a good investment or a top pick?

BMO Covered Call Utilities ETF was recommended as a Top Pick by on . Read the latest stock experts ratings for BMO Covered Call Utilities ETF.

Why is BMO Covered Call Utilities ETF stock dropping?

Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.

Is BMO Covered Call Utilities ETF worth watching?

15 stock analysts on Stockchase covered BMO Covered Call Utilities ETF In the last year. It is a trending stock that is worth watching.

What is BMO Covered Call Utilities ETF stock price?

On 2022-06-24, BMO Covered Call Utilities ETF (ZWU-T) stock closed at a price of $12.65.

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