Dividend Stocks
Dividends can produce as much as a third of your total return over long periods, and you can even retire on dividends.
There are 4 key stock dividend dates that are involved with dividend payments:
1- The Declaration Date is several weeks in advance of a dividend payment—it’s when company’s board of directors sets the amount and timing of the proposed payment.
2- The Payable Date is the date set by the board on which the dividend will actually be paid out to shareholders.
3- The Record Date is for shareholders who hold the stock before the payable date and receive the dividend payment. That date is set any number of weeks before the payable date.
4-The Ex-Dividend Date is two business days before the record date and it’s when the shares begin to trade without their dividend. If you buy stocks one day or more before their ex-dividend date, you will still get the dividend. That’s when a stock is said to trade cum-dividend. If you buy on the ex-dividend date or later, you won’t get the dividend. The ex-dividend date is in place to allow pending stock trades to settle.
We think very highly of stocks that have been paying dividends for five or more years, at TSI Network. Many of these stocks fit in well with our three-part Successful Investor philosophy:
1- Invest mainly in well-established companies;
2- Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities);
3- Downplay or avoid stocks in the broker/media limelight.
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AGRIUM INC. $104 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 144.5 million; Market cap: $15.0 billion; Price-to-sales ratio: 0.9; Dividend yield: 3.2%; TSINetwork Rating: Average; www.agrium.com) makes nitrogen-based fertilizers from natural gas. That could weaken its earnings growth, because the particularly cold North American winter has pushed up gas prices.
However, Agrium uses hedging contracts to lock in gas prices, which cuts its risk. Moreover, it gets 70% of its revenue by selling seeds and fertilizers to farmers through its 1,250 stores in North America, South America and Australia. That further reduces its gas-price exposure.
Agrium is a buy....
However, Agrium uses hedging contracts to lock in gas prices, which cuts its risk. Moreover, it gets 70% of its revenue by selling seeds and fertilizers to farmers through its 1,250 stores in North America, South America and Australia. That further reduces its gas-price exposure.
Agrium is a buy....
CANADIAN TIRE CORP. $98 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 80.2 million; Market cap: $7.9 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www. canadiantire.ca) recently sold 16.9% of CT Real Estate Investment Trust (Toronto symbol CRT.UN) through an initial public offering. CT REIT holds 72% of Canadian Tire’s real estate assets, including 255 stores and one distribution centre. The company received $279.3 million for these shares.
Meanwhile, Canadian Tire earned $145.5 million in the three months ended September 28, 2013, up 10.7% from $131.4 million a year earlier. Earnings per share gained 11.2%, to $1.79 from $1.61, on fewer shares outstanding. Sales rose 4.5%, to $3.0 billion from $2.8 billion.
Strong demand for automotive and kitchen products pushed up same-store sales by 2.0% at the company’s 491 Canadian Tire stores. Same-store sales rose 6.3% at its 415 sports outlets, partly due to the Pro Hockey Life chain, acquired in August 2013. Same-store sales at the 386-store Mark’s clothing chain gained 4.3%.
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Meanwhile, Canadian Tire earned $145.5 million in the three months ended September 28, 2013, up 10.7% from $131.4 million a year earlier. Earnings per share gained 11.2%, to $1.79 from $1.61, on fewer shares outstanding. Sales rose 4.5%, to $3.0 billion from $2.8 billion.
Strong demand for automotive and kitchen products pushed up same-store sales by 2.0% at the company’s 491 Canadian Tire stores. Same-store sales rose 6.3% at its 415 sports outlets, partly due to the Pro Hockey Life chain, acquired in August 2013. Same-store sales at the 386-store Mark’s clothing chain gained 4.3%.
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MOLSON COORS CANADA INC. (Toronto symbols TPX.A $62 and TPX.B $62; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 183.9 million; Market cap: $11.4 billion; Price-to-sales ratio: 1.6; Dividend yield: 2.3%; TSINetwork Rating: Average; www.molsoncoors.com) continues to make progress integrating StarBev LP, which it bought for $3.4 billion in June 2012 (all amounts except share prices and market cap in U.S. dollars). StarBev owns nine breweries in central and eastern Europe.
These savings are helping Molson Coors offset slowing beer demand. In the third quarter of 2013, its earnings rose 7.7%, to $268.1 million from $248.9 million a year earlier. Due to more shares outstanding, earnings per share gained 5.8%, to $1.45 from $1.37. However, sales fell 2.0%, to $1.17 billion from $2.0 billion.
The class B shares have less voting power to elect directors than the class A shares, but they are more liquid and receive the same dividend.
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These savings are helping Molson Coors offset slowing beer demand. In the third quarter of 2013, its earnings rose 7.7%, to $268.1 million from $248.9 million a year earlier. Due to more shares outstanding, earnings per share gained 5.8%, to $1.45 from $1.37. However, sales fell 2.0%, to $1.17 billion from $2.0 billion.
The class B shares have less voting power to elect directors than the class A shares, but they are more liquid and receive the same dividend.
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CANADIAN PACIFIC RAILWAY LTD. $164 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 175.4 million; Market cap: $28.8 billion; Price-to-sales ratio: 4.8; Dividend yield: 0.9%; TSINetwork Rating: Above Average; www.cpr.ca) is selling 26% of the track miles of its Dakota, Minnesota & Eastern (DM&E) railway, which carries grain, fertilizer and other products between Minnesota and South Dakota.
The company acquired DM&E in 2008 for $1.5 billion. It decided to sell this portion as part of its new plan to focus on its more profitable rail lines. It will receive $210 million U.S. when the deal closes later this year. That’s equal to 69% of the $331 million (Canadian), or $1.88 a share, that CP earned in the three months ended September 30, 2013.
CP Rail is a buy....
The company acquired DM&E in 2008 for $1.5 billion. It decided to sell this portion as part of its new plan to focus on its more profitable rail lines. It will receive $210 million U.S. when the deal closes later this year. That’s equal to 69% of the $331 million (Canadian), or $1.88 a share, that CP earned in the three months ended September 30, 2013.
CP Rail is a buy....
DUNDEE CORP. $19 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 54.1 million; Market cap: $1.0 billion; Price-to-sales ratio: 2.8; No dividends paid; TSINetwork Rating: Average; www.dundeecorp.com) owns businesses in the wealth management, real estate, natural resource and agriculture industries.
In the three months ended September 30, 2013, Dundee earned $2.6 million, or $0.01 a share. That’s a big drop from the $21.2 million, or $0.34 a share, it earned a year earlier. Dundee’s earnings fell on higher costs as it expands its agricultural businesses. Revenue fell 14.5%, to $41.2 million from $48.2 million.
Dundee is still a buy....
In the three months ended September 30, 2013, Dundee earned $2.6 million, or $0.01 a share. That’s a big drop from the $21.2 million, or $0.34 a share, it earned a year earlier. Dundee’s earnings fell on higher costs as it expands its agricultural businesses. Revenue fell 14.5%, to $41.2 million from $48.2 million.
Dundee is still a buy....
CANADIAN UTILITIES LTD. (Toronto symbols CU [class A non-voting] $37 and CU.X [class B voting] $37; Income Portfolio, Utilities sector; Shares outstanding: 260.1 million; Market cap: $9.6 billion; Price-to-sales ratio: 2.8; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.canadianutilities.com) distributes electricity and natural gas in Alberta and Australia. It also operates 18 power plants in Canada, Australia and the U.K. ATCO Ltd. (see page 14) owns 53.1% of the company.
In the three months ended September 30, 2013, Canadian Utilities earned $127 million, up 8.5% from $117 million a year earlier. Earnings per share rose 4.8%, to $0.44 from $0.42, on more shares outstanding.
Without unusual items, mainly deferred payments from or refunds paid to customers, earnings would have risen 6.7%. Revenue gained 5.7%, to $755 million from $714 million, mainly due to higher power rates.
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In the three months ended September 30, 2013, Canadian Utilities earned $127 million, up 8.5% from $117 million a year earlier. Earnings per share rose 4.8%, to $0.44 from $0.42, on more shares outstanding.
Without unusual items, mainly deferred payments from or refunds paid to customers, earnings would have risen 6.7%. Revenue gained 5.7%, to $755 million from $714 million, mainly due to higher power rates.
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ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $47 and ACO.Y [class II voting] $47; Income Portfolio, Utilities sector; Shares outstanding: 115.2 million; Market cap: $5.4 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.atco.com) holds 53.1% of Canadian Utilities (see page 15). It also owns 75.5% of ATCO Structures & Logistics, which builds temporary buildings for construction and energy exploration firms; Canadian Utilities owns the remaining 24.5%.
In the three months ended September 30, 2013, ATCO’s revenue rose 3.5% to $1.02 billion from $981.0 million a year earlier. That’s mainly because higher power rates in Alberta increased Canadian Utilities’ contribution. The structures division’s revenue fell 2.5% after it completed three contracts to build temporary housing and offices at an Australian liquefied natural gas (LNG) project in late 2012 and early 2013.
Earnings jumped 63.0%, to $132 million, or $1.15 a share, from $81 million, or $0.71. Without unusual items, earnings rose 6.3%.
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In the three months ended September 30, 2013, ATCO’s revenue rose 3.5% to $1.02 billion from $981.0 million a year earlier. That’s mainly because higher power rates in Alberta increased Canadian Utilities’ contribution. The structures division’s revenue fell 2.5% after it completed three contracts to build temporary housing and offices at an Australian liquefied natural gas (LNG) project in late 2012 and early 2013.
Earnings jumped 63.0%, to $132 million, or $1.15 a share, from $81 million, or $0.71. Without unusual items, earnings rose 6.3%.
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CANADA BREAD CO. LTD. $72 (Toronto symbol CBY; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 25.4 million; Market cap: $1.8 billion; Price-to-sales ratio: 1.2; Dividend yield: 2.8%; TSINetwork Rating: Above Average; www.canadabread.ca) recently sold its Olivieri Foods business, which makes pasta and sauces, to Spain’s Ebro Foods. The company received $120 million, increasing its cash holdings to $308 million. Its recent $8.00-a-share special dividend cost it $203.2 million.
The special dividend would seem to indicate that Maple Leaf (see page 13) is close to selling its 90.0% stake in Canada Bread. If not, Canada Bread would likely invest the cash from the Olivieri sale in its own bakeries or pursue acquisitions.
But even if Maple Leaf hangs on to Canada Bread, its future looks bright. It recently opened a $100-million bakery in Hamilton, Ontario, which let it close three outdated facilities in Toronto and shift their production to the new plant.
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The special dividend would seem to indicate that Maple Leaf (see page 13) is close to selling its 90.0% stake in Canada Bread. If not, Canada Bread would likely invest the cash from the Olivieri sale in its own bakeries or pursue acquisitions.
But even if Maple Leaf hangs on to Canada Bread, its future looks bright. It recently opened a $100-million bakery in Hamilton, Ontario, which let it close three outdated facilities in Toronto and shift their production to the new plant.
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MAPLE LEAF FOODS INC. $16 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 140.1 million; Market cap: $2.2 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.0%; TSINetwork Rating: Average; www.mapleleaf.ca) is Canada’s largest food processing company. It mainly sells its products, including fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands.
The company recently said it plans to sell its 90.0% stake in Canada Bread (see right), Canada’s second-largest producer of baked goods after Weston Bakery.
Canada Bread supplies a third of Maple Leaf’s sales. Maple Leaf’s $1.6-billion stake in this business is equal to 73% of its $2.2-billion market cap.
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The company recently said it plans to sell its 90.0% stake in Canada Bread (see right), Canada’s second-largest producer of baked goods after Weston Bakery.
Canada Bread supplies a third of Maple Leaf’s sales. Maple Leaf’s $1.6-billion stake in this business is equal to 73% of its $2.2-billion market cap.
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TECK RESOURCES LTD. $27 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 576.3 million; Market cap: $15.6 billion; Price-tosales ratio: 1.6; Dividend yield: 3.3%; TSINetwork Rating: Average; www.teck.com) is down 27.0% since we made it our #1 pick for 2013.
That’s mainly because slowing industrial activity, mainly in Asia, has hurt demand for Teck’s metallurgical coal, a key ingredient in steelmaking.
The company sold a record 7.6 million tonnes of metallurgical coal in the third quarter of 2013, up 36.5% from a year earlier. However, coal prices fell 28.0%, to $139 U.S. a tonne from $193. The uncertain economy has also hurt prices for Teck’s other products, including copper and zinc.
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That’s mainly because slowing industrial activity, mainly in Asia, has hurt demand for Teck’s metallurgical coal, a key ingredient in steelmaking.
The company sold a record 7.6 million tonnes of metallurgical coal in the third quarter of 2013, up 36.5% from a year earlier. However, coal prices fell 28.0%, to $139 U.S. a tonne from $193. The uncertain economy has also hurt prices for Teck’s other products, including copper and zinc.
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