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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TORSTAR CORP. $7.15 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.7 million; Market cap: $569.9 million; Price-to-sales ratio: 0.4; Dividend yield: 7.3%; TSINetwork Rating: Above Average; www.torstar.com) owns romance novel publisher Harlequin, which recently formed a joint venture with Cosmopolitan magazine that will publish two e-books a month, starting in August 2013.
The new series, called Cosmo Red Hot Reads, will help Harlequin profit from fast-growing demand for erotica, such as the best-selling Fifty Shades of Grey trilogy. Harlequin has also hired best-selling author Sylvia Day to launch this new series, which should help attract new readers.
Torstar is a buy....
The new series, called Cosmo Red Hot Reads, will help Harlequin profit from fast-growing demand for erotica, such as the best-selling Fifty Shades of Grey trilogy. Harlequin has also hired best-selling author Sylvia Day to launch this new series, which should help attract new readers.
Torstar is a buy....
ENBRIDGE INC. $46 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 806.5 million; Market cap: $37.1 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.7%; TSINetwork Rating: Above Average; www.enbridge.com) has agreed to build a 50-kilometre pipeline that will connect the Hangingstone oil sands project in Alberta to its existing pipeline system. This will be the ninth oil sands project to use this network.
The company will spend $200 million to build this pipeline. That’s equal to 16% of the $1.25 billion, or $1.62 a share, that Enbridge earned in 2012. The new line should begin operating in late 2015. Enbridge also has a 25-year shipping contract with Hangingstone’s developer, which cuts the risk of this investment.
Enbridge is a buy....
The company will spend $200 million to build this pipeline. That’s equal to 16% of the $1.25 billion, or $1.62 a share, that Enbridge earned in 2012. The new line should begin operating in late 2015. Enbridge also has a 25-year shipping contract with Hangingstone’s developer, which cuts the risk of this investment.
Enbridge is a buy....
FINNING INTERNATIONAL INC. $24 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 171.9 million; Market cap: $4.1 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.finning.com) sells and services heavy equipment made by Caterpillar Inc. (New York symbol CAT). Its main customers are in the oil, mining, forest products and construction industries.
In May 2012, Finning paid Caterpillar $305.8 million U.S. for Bucyrus’s distribution and support businesses in South America and the U.K.; Bucyrus makes equipment for clients in the mining and oil sands industries. In October 2012, Finning paid $159.2 million for Bucyrus’s Canadian operations.
Thanks to these new operations, Finning’s revenue rose 12.3% in 2012, to a record $6.6 billion from $5.9 billion in 2011. Earnings jumped 30.1%, to $337.6 million, or $1.96 a share, from $259.4 million, or $1.51 a share. Bucyrus contributed $0.09 a share to the latest earnings.
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In May 2012, Finning paid Caterpillar $305.8 million U.S. for Bucyrus’s distribution and support businesses in South America and the U.K.; Bucyrus makes equipment for clients in the mining and oil sands industries. In October 2012, Finning paid $159.2 million for Bucyrus’s Canadian operations.
Thanks to these new operations, Finning’s revenue rose 12.3% in 2012, to a record $6.6 billion from $5.9 billion in 2011. Earnings jumped 30.1%, to $337.6 million, or $1.96 a share, from $259.4 million, or $1.51 a share. Bucyrus contributed $0.09 a share to the latest earnings.
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ENCANA CORP. $20 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 736.3 million; Market cap: $14.7 billion; Price-to-sales ratio: 2.7; Dividend yield: 4.1%; TSINetwork Rating: Average; www.encana.com) earned $997 million, or $1.35 a share (all amounts except share price and market cap in U.S. dollars) in 2012.
That’s down 16.3% from $1.2 billion, or $1.62 a share, in 2011. Cash flow per share fell 16.1%, to $4.80 from $5.72. Revenue declined 39.1%, to $5.2 billion from $8.5 billion. That’s partly because it sold $4.0 billion of assets in 2012, including stakes in its shale gas properties in B.C. and Alberta.
Encana benefits from its hedging program, which has shielded it from falling gas prices. In 2012, it sold its gas at an average of $4.82 per thousand cubic feet, compared to today’s price of $3.16. For 2013, Encana has hedged 52% of its forecast production at $4.39 per thousand cubic feet.
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That’s down 16.3% from $1.2 billion, or $1.62 a share, in 2011. Cash flow per share fell 16.1%, to $4.80 from $5.72. Revenue declined 39.1%, to $5.2 billion from $8.5 billion. That’s partly because it sold $4.0 billion of assets in 2012, including stakes in its shale gas properties in B.C. and Alberta.
Encana benefits from its hedging program, which has shielded it from falling gas prices. In 2012, it sold its gas at an average of $4.82 per thousand cubic feet, compared to today’s price of $3.16. For 2013, Encana has hedged 52% of its forecast production at $4.39 per thousand cubic feet.
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SNC-LAVALIN GROUP INC. $45 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.1 million; Market cap: $6.8 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.0%; TSINetwork Rating: Average; www.snclavalin.com) has held up well in the face of negative press coverage, beginning with $56 million U.S. in unusual payments it made in 2011 to help win Libyan construction contracts. Lately, the company has come under scrutiny over allegations of widespread corruption in the Quebec construction industry.
SNC’s quick response to these situations, including replacing its chief executive officer and other executives, helped prevent permanent damage to its 102-year-old reputation. It has also brought in stronger oversight and compliance procedures.
Due to higher than-expected costs on a powerplant project, SNC’s 2012 earnings fell 18.4%, to $309.1 million, or $2.04 a share. In 2011, the company earned $378.8 million, or $2.49 a share.
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SNC’s quick response to these situations, including replacing its chief executive officer and other executives, helped prevent permanent damage to its 102-year-old reputation. It has also brought in stronger oversight and compliance procedures.
Due to higher than-expected costs on a powerplant project, SNC’s 2012 earnings fell 18.4%, to $309.1 million, or $2.04 a share. In 2011, the company earned $378.8 million, or $2.49 a share.
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CANADIAN PACIFIC RAILWAY LTD. $124 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 174.6 million; Market cap: $21.7 billion; Price-to-sales ratio: 3.8; Dividend yield: 1.1%; TSINetwork Rating: Above Average; www.cpr.ca) suffered two derailments in the past month that resulted in oil spills. One of these incidents was in Minnesota, and the other was in northern Ontario. However, the spills were minor, and the cleanup costs should not have a large impact on CP’s earnings.
The company should keep benefiting from rising demand for trains to ship oil. That’s because a lack of new pipelines has forced more producers to ship their crude by train. CP will probably ship 70,000 carloads of oil this year, up 438.5% from 13,000 in 2011.
CP Rail is a buy....
The company should keep benefiting from rising demand for trains to ship oil. That’s because a lack of new pipelines has forced more producers to ship their crude by train. CP will probably ship 70,000 carloads of oil this year, up 438.5% from 13,000 in 2011.
CP Rail is a buy....
SUNCOR ENERGY INC. $30 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.5 billion; Market cap: $45.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.7%; TSINetwork Rating: Average; www.suncor.com) has cancelled its $11-billion Voyageur oil sands upgrader project, which would have converted the tar-like bitumen into a lighter form of oil that is easier to pump through pipelines to refineries. The company cancelled Voyageur because a lack of new pipeline capacity is hurting oil prices and the project’s economic viability.
As part of this decision, Suncor paid $515 million to Total SA for its 49% stake in Voyageur. The price is equal to 11% of the $4.9 billion, or $3.16 a share, that Suncor earned in 2012. Buying back this stake will make it easier for Suncor to use some of Voyageur’s equipment at its other oil sands projects.
Suncor is still a buy....
As part of this decision, Suncor paid $515 million to Total SA for its 49% stake in Voyageur. The price is equal to 11% of the $4.9 billion, or $3.16 a share, that Suncor earned in 2012. Buying back this stake will make it easier for Suncor to use some of Voyageur’s equipment at its other oil sands projects.
Suncor is still a buy....
CANADA BREAD CO. LTD. $51 (Toronto symbol CBY; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 25.4 million; Market cap: $1.3 billion; Price-to-sales ratio: 0.8; Dividend yield: 3.9%; TSINetwork Rating: Above Average; www.canadabread.ca) is Canada’s second-largest producer of fresh and frozen baked goods, after Weston Bakery. It also makes pastas and sauces. The company’s main brands include Dempster, Tenderflake and Olivieri.
Canada Bread supplies around a third of Maple Leaf’s sales (see page 44). As a result, it has a big role in Maple Leaf’s restructuring.
For example, in 2011, Canada Bread opened a new $100-million bakery in Hamilton, Ontario. That let it close two outdated facilities in Toronto and shift their production to the new plant; it plans to close a third Toronto bakery in 2013.
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Canada Bread supplies around a third of Maple Leaf’s sales (see page 44). As a result, it has a big role in Maple Leaf’s restructuring.
For example, in 2011, Canada Bread opened a new $100-million bakery in Hamilton, Ontario. That let it close two outdated facilities in Toronto and shift their production to the new plant; it plans to close a third Toronto bakery in 2013.
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MAPLE LEAF FOODS INC. $14 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 140.0 million; Market cap: $2.0 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.1%; TSINetwork Rating: Average; www.mapleleaf.ca) is Canada’s largest foodprocessing company. It mainly sells its products, which include fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands. Though 90.0%-owned Canada Bread (see right), the company also makes fresh and frozen bread, pastries and pasta.
Maple Leaf is starting to see the benefits of a major restructuring plan, which includes building new plants and eliminating unprofitable products. It’s also installing a new computer system that will give its managers more timely information.
In 2012, Maple Leaf’s earnings rose 40.5%, to $122.7 million, or $0.81 a share. In 2011, it earned $87.3 million, or $0.58 a share. If you disregard restructuring costs, earnings per share rose at a more modest rate of 5.0%, to $1.06 from $1.01.
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Maple Leaf is starting to see the benefits of a major restructuring plan, which includes building new plants and eliminating unprofitable products. It’s also installing a new computer system that will give its managers more timely information.
In 2012, Maple Leaf’s earnings rose 40.5%, to $122.7 million, or $0.81 a share. In 2011, it earned $87.3 million, or $0.58 a share. If you disregard restructuring costs, earnings per share rose at a more modest rate of 5.0%, to $1.06 from $1.01.
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SAPUTO INC. $50 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 197.2 million; Market cap: $9.9 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.7%; TSINetwork Rating: Average; www.saputo.com) is Canada’s largest producer of dairy products, including milk, butter and cheese. It also makes snack cakes and tarts. Saputo operates in the U.S., Argentina and Europe.
In its fiscal 2013 third quarter, which ended December 31, 2012, Saputo earned $130.0 million, or $0.65 a share. That’s up 0.2% from $129.8 million, or $0.64 a share, a year earlier. Revenue was unchanged at $1.8 billion. Unfavourable currency exchange rates offset the positive impact of higher cheese prices in the U.S. The company’s Argentinian division also sold fewer products at lower prices, which weighed on Saputo’s overall earnings.
These results do not include privately held Morningstar Foods, which Saputo bought for $1.4 billion in January 2013. Morningstar makes milk products, including cream, ice cream and cottage cheese, at 10 plants in the U.S.
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In its fiscal 2013 third quarter, which ended December 31, 2012, Saputo earned $130.0 million, or $0.65 a share. That’s up 0.2% from $129.8 million, or $0.64 a share, a year earlier. Revenue was unchanged at $1.8 billion. Unfavourable currency exchange rates offset the positive impact of higher cheese prices in the U.S. The company’s Argentinian division also sold fewer products at lower prices, which weighed on Saputo’s overall earnings.
These results do not include privately held Morningstar Foods, which Saputo bought for $1.4 billion in January 2013. Morningstar makes milk products, including cream, ice cream and cottage cheese, at 10 plants in the U.S.
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