A new study from the Business Development Bank of Canada finds that 76% of the small- and medium-sized Canadian businesses surveyed saw a decline in revenue and profits in 2020. Nearly half laid off staff, while about 39% of entrepreneurs have taken on more debt to survive.

The good news is that recent experience has shocked many households and businesses to focus on greater efficiency, reduce costs, and build up cash savings – critical behaviours needed to restore financial strength.

The bad news is that as the recession and under-employment continue, many lack the income needed to rebuild. Many are more indebted now than they were six months ago.

Two-thirds of small business owners say they’re in a worse situation now than before the pandemic. And insolvency trustees are warning of similar trends in Canadian households.

New Bank of Canada chief Tiff Macklem acknowledged Canada’s debt-linked fragility today in a speech: “The bottom line is that the private and public sectors together need to be acutely aware of financial system risks and vulnerabilities as the economy recovers.”

Falling commercial and residential rents are much needed for reducing overhead costs, but property prices must also follow, and the income and balance sheet losses will hurt present owners and lenders.

As shown in the chart below (source: not indicated), since 1990, central banks don’t admit it, but the policy obsession with lower and lower interest rates is the cornerstone of our present fragility.

As the interest component of mortgage payments flatlined from 2008 to 2017, prices paid soared along with the debt’s principal portion. This inflated debt is now a heavyweight on consumption and saving ability for years into the future.

Simultaneously, the low rates that have enabled record debt, unaffordable shelter and other asset bubbles have worsened retirement prospects worldwide as

Let thy step be slow and steady, that thou stumble not. – Tokugawa Ieyasu

Ever since its inception in January 1987, DNP Select Income Fund (DNP) has been paying dividends consistently. Its distribution reliability and operational durability are factors that have earned it the reputation of a trustworthy fund for income seekers. This is the reason why its market price trades at a premium to its NAV. For the record, its NAV is $8.47 whereas its market price is $10.09 as of October 5, 2020.

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Source: Wallmine

Is the price premium justified? Is DNP a buy for income seekers today? Here’s my take:

Investment Strategy & Portfolio

DNP’s goal is to provide investors with current income and long-term income growth by investing mainly in equity and fixed income securities of companies in the public utilities sector. Capital appreciation is a secondary objective.

As of April 29, 2020, DNP’s balance sheet totaled $3.67 billion. Its borrowings were $997 million as of the same date, and its stockholder’s equity and retained earnings were $2.64 billion and $594 million, respectively.

Its top 10 holdings as of July 31, 2020, that accounted for 27% of its total investments were:

  • Eversource Energy (ES): A renewable energy utility
  • Ameren Corp. (AEE): Another renewable energy utility
  • Xcel Energy (XEL): Yet another company focused on renewable energy
  • Crown Castle International Corp. (CCI): Currently riding high on 5G
  • Evergy Inc. (EVRG): Kansas-based regular energy utility
  • CMS Energy Corp. (CMS): An energy utility that serves Michigan
  • NextEra Energy (NEE): Another strong renewable energy company
  • WEC Energy Group (WEC): A regular energy utility that serves Wisconsin, Illinois, Michigan, and Minnesota
  • American Water Works Co. (AWK): Water and wastewater management utility with strong financials
  • Public Service Enterprises Group (NYSE:PEG): An energy utility backed by strong financials

DNP’s top 10 holdings make

G&G Independent Insurance (G&G) in Fayetteville, Ark., has acquired the Little Rock-based agency, Arkansas Insurance Advisors (AIA).

The transaction became effective on Sept. 25, 2020.

Founded in 2015, AIA is an independent insurance agency that focuses on ensuring clients have the proper insurance coverage at a competitive price in Central Arkansas. As a part of the transaction, AIA’s employees will join G&G’s operations and continue to work out of their existing location in Little Rock.

G&G Independent Insurance is a full service independent insurance agency located in Fayetteville, Ark. G&G was founded, and is operated, with a commitment to providing clients the best possible protection, at the most affordable price. G&G offers a wide variety of coverage including auto insurance, home insurance, motorcycle insurance, flood insurance, life insurance, commercial insurance and more.

Source: G&G Independent Insurance

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Plymouth Rock Assurance launched motorcycle insurance for riders across New Jersey and Pennsylvania.

The launch of the product comes than a year after the company acquired Rider Insurance Co., which has focused on the motorcycle community for 50 years.

Plymouth Rock’s Motorcycle Insurance was built to give riders all the necessary coverages such as new bike replacement for destroyed or stolen motorcycles that are two model years old or newer, zero-deductible replacement for helmet and safety apparel, meal and hotel reimbursement if a bike breaks down away from home. Accessory coverage is included for up to $3,000, with higher limits available, as well as 24-hour roadside assistance, helmet coverage, trip interruption coverage and trailer coverage.

Like its recently launched umbrella insurance and digital @Home Property insurance products, Plymouth Rock’s Motorcycle Insurance offers a quoting process designed to be simple for both consumers and agents. Plymouth Rock Motorcycle Insurance is available now to customers and agents in New Jersey and Pennsylvania, and the company plans to introduce the new product in its other states in 2021.

Motorcycle insurance in New Jersey and Pennsylvania is underwritten by Rider Insurance Company, Woodbridge, NJ. Umbrella insurance is underwritten in New Jersey and Pennsylvania by Palisades Property and Casualty Insurance Company, Woodbridge, NJ.

Plymouth Rock Assurance and Plymouth Rock are brand names and service marks used by separate underwriting, managed insurance, and management companies that offer property and casualty insurance in multiple states. Taken together, the companies write and manage more than $1.6 billion in auto and home insurance premiums.

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