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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TECK RESOURCES LTD. $29 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 586.0 million; Market cap: $17.0 billion; Priceto- sales ratio: 1.4; Dividend yield: 2.8%; TSINetwork Rating: Average; www.teck.com) is selling more metallurgical coal and copper thanks to recent expansion projects.

Coal sales in the three months ended June 30, 2012 rose 19.6%, to 6.7 million tonnes from 5.6 million a year earlier. Copper sales rose 10.4%, to 85,000 tonnes from 77,000 tonnes.

However, slowing growth in China and India cut coal prices by 25.7% from a year earlier. Copper prices fell 13.8%.

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TRANSCANADA CORP. $45 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 704.0 million; Market cap: $31.7 billion; Priceto- sales ratio: 3.5; Dividend yield: 3.9%; TSINetwork Rating: Above Average; www.transcanada.com) operates a 68,500- kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. The company’s pipelines supply 20% of North America’s natural gas. In 2011, they provided 49% of TransCanada’s revenue and 60% of its earnings.

In the past few years, the company has aggressively diversified into other businesses, mainly through acquisitions and big new projects.

It now owns or invests in over 20 electrical power plants in Alberta, Ontario, Quebec and the northeastern U.S. In all, these facilities have over 10,800 megawatts of generating capacity. Trans- Canada’s electrical power business now provides 42% of its revenue and 26% of its earnings.

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Pat McKeough responds to many personal questions on specific stocks and other investment topics from the members of his Inner Circle. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for the Inner Circle. This past week, an Inner Circle asked us about one of the handful of companies (outside of REITs) that has remained an income trust. This auto repair firm has undertaken a program of rapid growth that involves buying up smaller shops and chains. Pat assesses the pros and cons of this aggressive strategy. Q: Dear Pat: What do you think about Boyd Group Income Fund? Could you please give me your insight and recommendation? Thank you....
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BROOKFIELD RENEWABLE ENERGY PARTNERS L.P. (Toronto symbol BEP.UN; brookfieldrenewable.com) owns 170 hydroelectric generating stations, seven wind farms and two natural-gas-fired plants. In all, it has 4,909 megawatts of generating capacity. Roughly 35% of Brookfield Renewable’s generating capacity is in Canada, with another 45% in the U.S. and 20% in Brazil. The company sells virtually all of its power under agreements that are an average of 24 years in length....
TRANSCONTINENTAL INC. $9.60 (www.tctranscontinental.com) now owns 100% of Metro Montreal, a free commuter newspaper, after buying out its joint venture partner for an undisclosed amount....
strong>SNC-LAVALIN GROUP INC. $38 (www.snclavalin.com) has paid an undisclosed sum for Toronto-based engineering firm DBA Engineering. This firm specializes in paving and environmental cleanup, and should help SNC win more infrastructure contracts....
RESEARCH IN MOTION LTD. $7.57 (www.rim.com) has delayed the launch of smartphones that use its new BlackBerry 10 software to the first quarter of 2013. That’s because the company is having difficulty adapting this software to its email and messaging servers....
$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ 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: 1.6; Dividend yield: 4.1%; TSINetwork Rating: Average; www.encana.com) is one of North America’s largest natural gas producers. Its reserves should last over 11 years.

The company took its present form on December 1, 2009, after the old EnCana Corp. split itself into two new companies: the new Encana, which focuses on natural gas, and Cenovus Energy (Toronto symbol CVE), which specializes in oil sands projects, oil refineries and conventional natural gas.

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CANADIAN PACIFIC RAILWAY LTD. $74 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 170.9 million; Market cap: $12.6 billion; Price-to-sales ratio: 2.3; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.cpr.ca) has signed a long-term deal with U.S. Silica Holdings Inc. (New York symbol SLCA), a leading maker of specialized sand.

Oil and gas exploration companies pump this sand, along with water and other chemicals, into shale rock formations. This fractures the rock and releases the oil and gas.

Under the terms of this multi-year deal, Silica will use CP trains to ship sand from its new Sparta, Wisconsin facility to its customers. CP did not say how much this deal is worth, but it should help the company profit from rising production of shale oil in the Bakken area, which covers parts of Montana, North Dakota and Saskatchewan.

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SUNCOR ENERGY INC. $29 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.6 billion; Market cap: $46.4 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.8%; TSINetwork Rating: Average; www.suncor.com) produced an average of 343,000 barrels of oil per day at its oil sands projects in June 2012. That’s down 0.9% from 346,000 barrels in May 2012.

The company expects its oil sands production for all of 2012 to range from 325,000 to 355,000 barrels a day. If you include conventional oil and natural gas, Suncor should produce 530,000 to 580,000 barrels a day in 2012. The midpoint of that range is 1.6% higher than its average 2011 production of 546,000 barrels a day.

Suncor is a buy.

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