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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BANK OF NOVA SCOTIA $52 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.1 billion; Market cap: $57.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.scotiabank.com) has agreed to sell Scotia Plaza, its 68-storey office building in downtown Toronto.
Under the terms of the deal, Dundee REIT (Toronto symbol D.UN) and H&R REIT (Toronto symbol HR.UN) will pay Scotia $1.3 billion for the building when the sale closes, probably by June 30, 2012. Dundee will own two-thirds of the property, and H&R will own the remaining third. The bank will remain as the anchor tenant.
Meanwhile, Bank of Nova Scotia earned $1.5 billion in the three months ended April 30, 2012. That’s up 16.1% from $1.3 billion a year earlier. Earnings per share rose 8.5%, to $1.15 from $1.06, on more shares outstanding. Revenue rose 1.4%, to $4.7 billion from $4.6 billion. Strong gains at its international operations offset slower growth at its Canadian retail banking division.
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Under the terms of the deal, Dundee REIT (Toronto symbol D.UN) and H&R REIT (Toronto symbol HR.UN) will pay Scotia $1.3 billion for the building when the sale closes, probably by June 30, 2012. Dundee will own two-thirds of the property, and H&R will own the remaining third. The bank will remain as the anchor tenant.
Meanwhile, Bank of Nova Scotia earned $1.5 billion in the three months ended April 30, 2012. That’s up 16.1% from $1.3 billion a year earlier. Earnings per share rose 8.5%, to $1.15 from $1.06, on more shares outstanding. Revenue rose 1.4%, to $4.7 billion from $4.6 billion. Strong gains at its international operations offset slower growth at its Canadian retail banking division.
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LINAMAR CORP. $21 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.7 million; Market cap: $1.4 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.5%; TSINetwork Rating: Extra Risk; www.linamar.com) gets 85% of its revenue by making engines, transmissions and other precisionmachined parts for automakers. The company has plants in North America, Europe and Asia.
The remaining 15% of Linamar’s revenue comes from its self-propelled, scissor-type elevating work platforms, which it makes under the Skyjack name, plus consumer products, such as lawn mowers and cargo trailers.
Thanks to rising new car sales, Linamar’s earnings jumped 55.3%, to $0.59 a share, in the three months ended March 31, 2012. This figure excludes a foreign-exchange gain. A year earlier, Linamar earned $0.38 a share.
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The remaining 15% of Linamar’s revenue comes from its self-propelled, scissor-type elevating work platforms, which it makes under the Skyjack name, plus consumer products, such as lawn mowers and cargo trailers.
Thanks to rising new car sales, Linamar’s earnings jumped 55.3%, to $0.59 a share, in the three months ended March 31, 2012. This figure excludes a foreign-exchange gain. A year earlier, Linamar earned $0.38 a share.
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SHAWCOR LTD. $33 (Toronto symbol SCL.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 70.7 million; Market cap: $2.3 billion; Price-to-sales ratio: 2.0; Dividend yield: 1.2%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings that keep oil and gas pipelines from rusting (88% of revenue). It also manufactures electrical wire and protective sheaths (12% of revenue).
So far this year, ShawCor has won over $45 million U.S. of coating orders related to big offshore natural gas projects near Australia. In addition, it has received a $30-million U.S. contract to coat undersea pipelines for a gas platform off the coast of Indonesia.
Meanwhile, ShawCor’s revenue rose 11.7% in the three months ended March 31, 2012, to $312.3 million from $279.5 million a year earlier. The company is benefiting as pipeline operators expand their operations to handle higher oil and gas production in North America and Latin America.
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So far this year, ShawCor has won over $45 million U.S. of coating orders related to big offshore natural gas projects near Australia. In addition, it has received a $30-million U.S. contract to coat undersea pipelines for a gas platform off the coast of Indonesia.
Meanwhile, ShawCor’s revenue rose 11.7% in the three months ended March 31, 2012, to $312.3 million from $279.5 million a year earlier. The company is benefiting as pipeline operators expand their operations to handle higher oil and gas production in North America and Latin America.
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SNC-LAVALIN GROUP INC. $39 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 161.1 million; Market cap: $6.3 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.3%; TSINetwork Rating: Average; www.snclavalin.com) is a leading Canadian engineering and construction company. It specializes in large-scale public works projects, such as roads, bridges, transit systems and water-treatment plants.
SNC’s shares fell from around $48 in February 2012 after the company discovered $35 million of unusual payments related to certain construction contracts.
A panel of independent directors and lawyers later found another unusual payment, bringing the total to around $56 million. The company didn’t say which projects are connected to these transactions.
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SNC’s shares fell from around $48 in February 2012 after the company discovered $35 million of unusual payments related to certain construction contracts.
A panel of independent directors and lawyers later found another unusual payment, bringing the total to around $56 million. The company didn’t say which projects are connected to these transactions.
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CANADIAN PACIFIC RAILWAY LTD. $73 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 170.9 million; Market cap: $12.5 billion; Price-to-sales ratio: 2.4; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.cpr.ca) has attracted a lot of media attention lately. That’s mainly due to efforts by a U.S.-based investment firm that wants to improve its performance and possibly spark a takeover offer.
In our three-part Successful Investor portfolio strategy, we advise investors to invest mainly in well-established companies, spread your money out across the five main economic sectors, and downplay stocks that are in the broker/media limelight, which can bloat investor expectations.
Downturns can be brutal when stocks fail to live up to those inflated expectations. So, investors have asked why we chose a #1 stock that’s in what they see as ‘the limelight’. The difference is in the definition.
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In our three-part Successful Investor portfolio strategy, we advise investors to invest mainly in well-established companies, spread your money out across the five main economic sectors, and downplay stocks that are in the broker/media limelight, which can bloat investor expectations.
Downturns can be brutal when stocks fail to live up to those inflated expectations. So, investors have asked why we chose a #1 stock that’s in what they see as ‘the limelight’. The difference is in the definition.
...
CANADIAN NATIONAL RAILWAY CO. $84 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 438.7 million; Market cap: $36.9 billion; Price-to-sales ratio: 4.1; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.cn.ca) operates the largest freight-rail network in Canada, with access to major ports such as Vancouver, Montreal and Halifax. It also serves 16 U.S. states, including ports in New Orleans and Mobile, Alabama.
Ottawa nationalized CN in 1922 because of the vital role the company played in Canada’s early growth. CN became a publicly traded company in 1995.
CN hauls consumer and industrial goods (22% of 2011 revenue), grain and fertilizers (19%), petroleum products (17%), forest products (16%), metals and minerals (12%), coal (8%) and automotive products (6%).
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Ottawa nationalized CN in 1922 because of the vital role the company played in Canada’s early growth. CN became a publicly traded company in 1995.
CN hauls consumer and industrial goods (22% of 2011 revenue), grain and fertilizers (19%), petroleum products (17%), forest products (16%), metals and minerals (12%), coal (8%) and automotive products (6%).
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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. This past week, an Inner Circle member asked about one of the Canadian dividend stocks that was an income fund before the trust tax of 2011. This company raises revenue in a variety of ways, including the franchising of its company-owned gas stations, which allows it to collect commissions without high overhead. ...
From time to time, I read articles saying that growing numbers of financial advisors and stockbrokers are abandoning the traditional buy-and-hold strategy. For instance, one article stated that some brokers were taking new approaches more in tune with the new “macro-economic climate.” That sounds suspiciously like just another way of trying to guess what will happen next....
Activist U.S. investment firm Pershing Square Capital continues to make its presence felt at CP Rail (Canadian symbol CP). With 14.2% of the company’s shares in its hands, Pershing Square has replaced seven of the 16 directors with its own nominees. And it may also aim to install Hunter Harrison, the man who made CNR more efficient, as CEO of Canadian Pacific Railway. Pershing’s involvement is just one reason why we made CP our #1 Stock Pick for 2012. It’s one of many reasons that CP Rail remains at the top of our list of Canadian stocks....
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. This past week, one Inner Circle member asked about dividend stocks—specifically, about a pipeline firm that is one of Canada’s remaining income funds. The company has just made a major overseas acquisition and Pat assesses the potential risk and rewards. ...
