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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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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BCE INC. $47 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 775.9 million; Market cap: $36.5 billion; Price-to-sales ratio: 1.7; Dividend yield: 5.0%; TSINetwork Rating: Above Average; www.bce.ca), like Telus (see left), continues to benefit from strong demand for wireless and high-speed Internet services. That’s a big reason why the stock is up 31% since 2008.
Unlike Telus, however, BCE has invested heavily in expanding its media operations, which include the 28-station CTV Television Network, 30 specialty channels and 33 radio stations.
BCE now hopes to complete its $3.0-billion purchase of Astral Media in June 2013. Montreal-based Astral owns 22 TV stations, 84 radio stations and popular specialty channels like The Movie Network and Teletoon.
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Unlike Telus, however, BCE has invested heavily in expanding its media operations, which include the 28-station CTV Television Network, 30 specialty channels and 33 radio stations.
BCE now hopes to complete its $3.0-billion purchase of Astral Media in June 2013. Montreal-based Astral owns 22 TV stations, 84 radio stations and popular specialty channels like The Movie Network and Teletoon.
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TELUS CORP. $70 (Toronto symbol T; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 326.8 million; Market cap: $22.9 billion; Price-to-sales ratio: 2.1; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.telus.com) now gets 54% of its revenue and 62% of its earnings from its 7.7 million wireless subscribers across Canada.
The remaining 46% of Telus’s revenue and 38% of earnings come from its wireline division, which mainly consists of 3.4 million traditional phone customers in B.C., Alberta and eastern Quebec. This business also includes 1.4 million Internet users and 678,000 TV customers.
Telus’s revenue fell 0.5%, from $9.7 billion in 2008 to $9.6 billion in 2009, but rose to $10.9 billion in 2012. Earnings fell 11.5%, from $1.1 billion, or $3.52 a share, in 2008 to $998 million, or $3.14 a share, in 2009. However, earnings rebounded to $1.3 billion, or $4.03 a share, in 2012.
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The remaining 46% of Telus’s revenue and 38% of earnings come from its wireline division, which mainly consists of 3.4 million traditional phone customers in B.C., Alberta and eastern Quebec. This business also includes 1.4 million Internet users and 678,000 TV customers.
Telus’s revenue fell 0.5%, from $9.7 billion in 2008 to $9.6 billion in 2009, but rose to $10.9 billion in 2012. Earnings fell 11.5%, from $1.1 billion, or $3.52 a share, in 2008 to $998 million, or $3.14 a share, in 2009. However, earnings rebounded to $1.3 billion, or $4.03 a share, in 2012.
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ENBRIDGE INC. (Toronto symbol ENB; www.enbridge.com) gets 90% of its revenue from pipelines that pump oil and gas from western Canada to eastern Canada and the U.S. The remaining 10% mainly comes from distributing gas to 2 million consumers in Ontario, Quebec and parts of New York State....
THOMSON REUTERS CORP. $31 (www.thomsonreuters.com) has increased its quarterly dividend by 1.6%, to $0.325 U.S. a share from $0.32 U.S. The new annual rate of $1.30 U.S. yields 4.3%. Buy.
CANADIAN IMPERIAL BANK OF COMMERCE $83 (www.cibc.com) earned $2.15 a share in the three months ended January 31, 2013. That’s up 9.1% from $1.97 a share a year earlier. The bank continues to expand its retail banking and wealth management operations....
MANITOBA TELECOM SERVICES INC. $33 (www. mtsallstream.com) reported that its revenue fell 3.5% in 2012, to $1.7 billion from $1.8 billion in 2011. That’s because revenue declined 8.3% at its Allstream division, which provides telecommunication services to businesses....
CANADIAN TIRE CORP. $70 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.1 million; Market cap: $5.7 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.0%; TSINetwork Rating: Above Average; www.canadiantire.ca) operates 490 Canadian Tire stores, which specialize in automotive, household and sporting goods. The company owns these stores, but franchisees operate most of them. Canadian Tire also operates 299 gas stations and 87 Part Source auto parts stores.
In the past few years, the company has diversified its product lines by purchasing retailers with specialized products. These include Mark’s, which sells casual clothing though 386 stores, and Forzani Group, which sells sporting goods through 495 outlets, mainly under the Sport Chek banner. As well, Canadian Tire will soon complete its $85- million purchase of Pro Hockey Life, which sells hockey equipment through 23 stores.
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In the past few years, the company has diversified its product lines by purchasing retailers with specialized products. These include Mark’s, which sells casual clothing though 386 stores, and Forzani Group, which sells sporting goods through 495 outlets, mainly under the Sport Chek banner. As well, Canadian Tire will soon complete its $85- million purchase of Pro Hockey Life, which sells hockey equipment through 23 stores.
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ROYAL BANK OF CANADA $63 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.5 billion; Market cap: $94.5 billion; Price-to-sales ratio: 2.4; Dividend yield: 4.0%; TSINetwork Rating: Above Average; www.rbc.com) earned $2.1 billion, or $1.36 a share, in the three months ended January 31, 2013. That’s up 11.6% from $1.9 billion, or $1.22 a share, a year earlier. Revenue rose 4.4%, to $7.9 billion from $7.6 billion. Royal set aside $349 million to cover potential loan defaults, up 30.7% from $267 million. That’s mainly due to extra provisions on specific loans at its securities-trading division.
Low interest rates continue to spur loan demand at Royal’s retail banking operations in Canada, the U.S. and the Caribbean. Strong results from the bank’s trading and wealth management divisions also contributed to the higher results.
Royal also raised its quarterly dividend by 5.0%, to $0.63 a share from $0.60. The new annual rate of $2.52 yields 4.0%.
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Low interest rates continue to spur loan demand at Royal’s retail banking operations in Canada, the U.S. and the Caribbean. Strong results from the bank’s trading and wealth management divisions also contributed to the higher results.
Royal also raised its quarterly dividend by 5.0%, to $0.63 a share from $0.60. The new annual rate of $2.52 yields 4.0%.
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