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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CAE INC. $11 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 259.2 million; Market cap: $2.9 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.8%; TSINetwork Rating: Average; www.cae.com) recently sold seven flight simulators and related equipment....
TRANSCANADA CORP. $49 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 705.0 million; Market cap: $34.5 billion; Price-to-sales ratio: 4.0; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.transcanada.com) has received approval from Nebraska’s governor for its plan to reroute the proposed Keystone XL pipeline around environmentally sensitive areas of the state.
The company is currently building Keystone XL in sections. When completed, it would pump oil from Alberta to the U.S. Gulf Coast. The final project still needs various approvals, including from the U.S. State Department. Even so, Nebraska’s consent makes Keystone XL’s approval more likely.
TransCanada is a buy.
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The company is currently building Keystone XL in sections. When completed, it would pump oil from Alberta to the U.S. Gulf Coast. The final project still needs various approvals, including from the U.S. State Department. Even so, Nebraska’s consent makes Keystone XL’s approval more likely.
TransCanada is a buy.
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CANADIAN PACIFIC RAILWAY LTD. $113 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 173.9 million; Market cap: $19.7 billion; Price-to-sales ratio: 3.5; Dividend yield: 1.2%; TSINetwork Rating: Above Average; www.cpr.ca) is improving its efficiency with new locomotives and software that optimizes train loads and speeds.
CP’s earnings fell 15.1% in 2012, to $484 million, or $2.79 a share. In 2011, the company earned $570 million, or $3.34 a share. However, if you disregard costs related to CP’s recently announced plan to cut 25% of its workforce, as well as writedowns of locomotives and other assets, its earnings per share would have risen 37.8%, to $4.34 from $3.15. Revenue rose 10.0%, to $5.7 billion from $5.2 billion.
The company’s operating ratio worsened to 83.3% from 81.3% a year ago. However, its restructuring should cut this figure to around 70% in 2013.
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CP’s earnings fell 15.1% in 2012, to $484 million, or $2.79 a share. In 2011, the company earned $570 million, or $3.34 a share. However, if you disregard costs related to CP’s recently announced plan to cut 25% of its workforce, as well as writedowns of locomotives and other assets, its earnings per share would have risen 37.8%, to $4.34 from $3.15. Revenue rose 10.0%, to $5.7 billion from $5.2 billion.
The company’s operating ratio worsened to 83.3% from 81.3% a year ago. However, its restructuring should cut this figure to around 70% in 2013.
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CANADIAN NATIONAL RAILWAY CO. $96 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 428.4 million; Market cap: $41.1 billion; Price-to-sales ratio: 4.0; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.cn.ca) earned $2.5 billion in 2012. That’s up 11.9% from $2.2 billion in 2011. The company spent $1.4 billion on share buybacks during the year. Because of fewer shares outstanding, earnings per share rose 15.9%, to $5.61 from $4.84.
Revenue rose 9.9%, to $9.9 billion from $9.0 billion. The company continues to benefit from rising trade between North America and Asia. CN also raised its freight rates and fuel surcharges.
CN’s operating costs rose 9% in 2012, mainly due to higher labour and fuel expenses. Even so, CN’s operating ratio improved to 62.9% from 63.5%. (Operating ratio is calculated by dividing a company’s regular operating costs by its revenue. The lower the ratio, the better.)
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Revenue rose 9.9%, to $9.9 billion from $9.0 billion. The company continues to benefit from rising trade between North America and Asia. CN also raised its freight rates and fuel surcharges.
CN’s operating costs rose 9% in 2012, mainly due to higher labour and fuel expenses. Even so, CN’s operating ratio improved to 62.9% from 63.5%. (Operating ratio is calculated by dividing a company’s regular operating costs by its revenue. The lower the ratio, the better.)
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LOBLAW COMPANIES LTD. $41 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 281.5 million; Market cap: $11.5 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.loblaw.ca) is Canada’s largest food retailer, with roughly 1,000 stores. George Weston Ltd. (Toronto symbol WN) owns 63% of the company’s shares.
Loblaw has announced a plan to form a real estate investment trust (REIT) that will hold most of its real estate assets.
Right now, the company owns 47 million square feet of real estate with a market value of $9 billion to $10 billion. Loblaw will transfer 35 million square feet of these properties—including stores, warehouses and office buildings—to the REIT. Loblaw will then rent these properties from this new trust. After the company closes this transaction in mid- 2013, it will sell units of the REIT to the public. Loblaw will hang on to a majority stake.
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Loblaw has announced a plan to form a real estate investment trust (REIT) that will hold most of its real estate assets.
Right now, the company owns 47 million square feet of real estate with a market value of $9 billion to $10 billion. Loblaw will transfer 35 million square feet of these properties—including stores, warehouses and office buildings—to the REIT. Loblaw will then rent these properties from this new trust. After the company closes this transaction in mid- 2013, it will sell units of the REIT to the public. Loblaw will hang on to a majority stake.
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MANITOBA TELECOM SERVICES INC. $32 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 67.0 million; Market cap: $2.1 billion; Price-to-sales ratio: 1.2; Dividend yield: 5.3%; TSINetwork Rating: Average; www.mtsallstream.com) gets around 55% of its revenue from its 1.3 million telephone and wireless customers in Manitoba.
The remaining 45% comes from its Allstream division, which sells integrated telephone, Internet and other communication services to businesses across Canada. Manitoba Telecom is now conducting a strategic review of Allstream. This could lead to a sale of some or all of this business.
Allstream is profitable, but while it accounts for almost half of Manitoba Telecom’s revenue, it only contributes 18% of the company’s operating earnings. So selling the division would let Manitoba Telecom expand its more profitable operations.
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The remaining 45% comes from its Allstream division, which sells integrated telephone, Internet and other communication services to businesses across Canada. Manitoba Telecom is now conducting a strategic review of Allstream. This could lead to a sale of some or all of this business.
Allstream is profitable, but while it accounts for almost half of Manitoba Telecom’s revenue, it only contributes 18% of the company’s operating earnings. So selling the division would let Manitoba Telecom expand its more profitable operations.
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TELUS CORP. (Toronto symbols T $68 and T.A $68; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 326.0 million; Market cap: $22.2 billion; Price-to-sales ratio: 2.0; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.telus.com) has received court approval for its plan to convert its 151 million non-voting class A shares into regular common shares (which have one vote each) on a one-for-one basis.
The company converted the shares in the U.S. on February 4, 2013. The move dilutes common shareholders’ voting power, but it lets the common shares trade on the New York Stock Exchange (symbol TU). Previously, only the non-voting shares traded on New York. The change should make the common shares more liquid. Telus will make the conversion in Canada on February 11, 2013.
Telus A stock is a buy.
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The company converted the shares in the U.S. on February 4, 2013. The move dilutes common shareholders’ voting power, but it lets the common shares trade on the New York Stock Exchange (symbol TU). Previously, only the non-voting shares traded on New York. The change should make the common shares more liquid. Telus will make the conversion in Canada on February 11, 2013.
Telus A stock is a buy.
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RIOCAN REAL ESTATE INVESTMENT TRUST $27 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 299.0 million; Market cap: $8.1 billion; Price-to-sales ratio: 5.3; Dividend yield: 5.2%; TSINetwork Rating: Average; www.riocan.com) has agreed to buy a mall in Oakville, Ontario, plus 50% of another mall in Burlington, Ontario. Right now, Primaris Retail Real Estate Investment Trust (Toronto symbol PMZ.UN) owns these malls. RioCan will buy them from a consortium that has launched a friendly takeover for Primaris. The $362-million price is equal to 4% of RioCan’s market cap.
The new malls will give RioCan more flexibility to attract tenants with leases that include space in its other Toronto-area malls.
RioCan is a buy.
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The new malls will give RioCan more flexibility to attract tenants with leases that include space in its other Toronto-area malls.
RioCan is a buy.
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BLACKBERRY $16 (Toronto symbol BB; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.0 million; Market cap: $8.4 billion; Price-to-sales ratio: 0.7; No dividends paid; TSINetwork Rating: Above Average; www.blackberry.com) is the new name of Research in Motion Ltd. (old symbol RIM). (Note: The company’s legal name will remain Research in Motion until shareholders approve the name change at the next annual meeting.)
The company recently launched two smartphones powered by its new BlackBerry 10 software: the BlackBerry Z10 uses a 4.2-inch touch-screen interface, while the BlackBerry Q10 features a smaller screen and a physical keyboard.
BlackBerry has already started selling the Z10 in Canada, the U.K. and other countries. The company will launch the new phone in the U.S. in March. It should launch the Q10 in April.
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The company recently launched two smartphones powered by its new BlackBerry 10 software: the BlackBerry Z10 uses a 4.2-inch touch-screen interface, while the BlackBerry Q10 features a smaller screen and a physical keyboard.
BlackBerry has already started selling the Z10 in Canada, the U.K. and other countries. The company will launch the new phone in the U.S. in March. It should launch the Q10 in April.
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TIM HORTONS INC. $49 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 154.5 million; Market cap: $7.6 billion; Price-to-sales ratio: 2.5; Dividend yield: 1.7%; TSINetwork Rating: Average; www.timhortons.com) is the largest fast-food company in Canada, with 3,365 outlets that mainly serve coffee and donuts. However, the company is attracting new customers with other foods, such as sandwiches and soups.
Tim Hortons’ success in Canada is helping it expand in other countries.
For example, many Tim Hortons outlets now sell ice cream through the company’s alliance with U.S.-based Cold Stone Creamery. That helps them attract more customers in the afternoon and evening. As part of this deal, Cold Stone sells Tim Hortons coffee and other products in its upscale ice cream parlours. In addition, the company continues to build new stores in the U.S.; it now has 755 outlets in that country. Most of Tim Hortons’ U.S. stores are in states along the Canadian border, where they can attract cross-border shoppers.
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Tim Hortons’ success in Canada is helping it expand in other countries.
For example, many Tim Hortons outlets now sell ice cream through the company’s alliance with U.S.-based Cold Stone Creamery. That helps them attract more customers in the afternoon and evening. As part of this deal, Cold Stone sells Tim Hortons coffee and other products in its upscale ice cream parlours. In addition, the company continues to build new stores in the U.S.; it now has 755 outlets in that country. Most of Tim Hortons’ U.S. stores are in states along the Canadian border, where they can attract cross-border shoppers.
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