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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TELUS CORP. (Toronto symbols T $53 and T.A $51; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 352.9 million; Market cap: $18.7 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.telus.com) continues to expand its wireless business. As a result, it now gets 52% of its earnings from its 7.1 million wireless subscribers across Canada. The company gets the remaining 48% of its earnings from its traditional phone business, which has 3.7 million customers in B.C., Alberta and eastern Quebec. Telus also has 1.2 million Internet subscribers. The company continues to profit from rising demand for smartphones and wireless data. Smartphones now account for 42% of its wireless users under long-term contracts, up from 25% a year earlier....
BCE INC. $39 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 777.5 million; Market cap: $30.3 billion; Price-to-sales ratio: 1.6; Dividend yield: 5.3%; TSINetwork Rating: Above Average; www.bce.ca) is Canada’s largest provider of telephone, Internet and wireless services. The company’s main subsidiary, Bell Canada, has 6.3 million residential and business customers in Ontario and Quebec. BCE sells wireless services to 7.3 million subscribers across Canada. As well, it has 2.1 million high-speed Internet customers and 2.0 million TV subscribers. Through Bell Media, the company owns the CTV Television Network (28 TV stations), 29 specialty channels and 33 radio stations. It also owns 45% of Bell Aliant....
CANADIAN PACIFIC RAILWAY LTD. $55 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 169.4 million; Market cap: $9.3 billion; Price-to-sales ratio: 1.9; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.cpr.ca) transports freight between Montreal and Vancouver. It also connects with hubs in the U.S. Midwest and Northeast. CP gets 25% of its revenue from the U.S. In 2010, CP got 28% of its revenue by hauling shipping containers that contain a variety of goods. Another 23% of its revenue came from hauling grain, followed by consumer and industrial products (19%), coal (10%), fertilizers (10%), automotive products (6%) and forest products (4%). CP’s revenue rose 16.7%, from $4.6 billion in 2006 to $5.3 billion in 2008, as increasing trade with Asia pushed up freight volumes. CP’s 2008 purchase of Dakota, Minnesota & Eastern Railroad Corp. (DM&E) for $1.5 billion also added to its revenue. DM&E operates a 4,000-kilometre rail network in eight midwestern states....
Our new FREE report, “Dividend Paying Stocks: How High Dividend Stocks Can Supercharge Your Income Investing,” is packed with all the advice and information you need to pick the right Canadian dividend stocks for your portfolio—and avoid the ones that could steer you into a financial disaster. Best of all, the report gives you full details on 4 of our favourite high dividend stocks, a dividend paying stock for aggressive investors—and 5 high dividend stocks you must avoid. Click here to download your FREE copy and get started right away.
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One of our favourite Canadian dividend stocks continues to boost its payout
Chemtrade Logistics Income Fund, symbol CHE.UN on Toronto, is one of North America’s largest suppliers of sulphuric acid, sulphur, liquid sulphur oxide and sodium hydrosulphite. It also supplies sodium chlorate, phosphorous pentasulphide and zinc oxide. In addition to selling chemicals, Chemtrade processes spent acid. We analyze Chemtrade in Stock Pickers Digest, our newsletter for aggressive investing. In the three months ended March 31, 2011, the income trust’s cash flow per share jumped 55.6%, to $0.84 from $0.54. Revenue rose 33.8%, to $169.6 million from $126.8 million. This was mostly due to a recovering economy and higher prices for sulphuric acid....
Transcontinental Inc., Toronto symbol TCL.A, is the largest commercial printer in Canada and Mexico, and the fourth-largest in North America. It also publishes newspapers and magazines. Transcontinental is one of the income investing stocks we analyze in our flagship newsletter, The Successful Investor. Transcontinental also has over 300 web sites. These web sites will become more important to the company’s growth in the next few years, as advertisers spend more on the Internet than on print products....
With today’s low interest rates, investors are paying more attention to dividend yields (a company’s total annual dividends paid per share divided by the current stock price). The best Canadian dividend stocks are responding by doing their best to maintain, or even increase, their payouts. That’s great news for Canadian investors. That’s because dividends are far more reliable than capital gains. More important, a dividend is a sign of investment quality. After all, dividends are impossible to fake — either the company has the cash to pay dividends or it doesn’t. What’s more, dividends can now contribute up to a third of your long-term investment return, without even considering the benefits of the dividend tax credit....
We’ve long recommended that all Canadian investors own shares of two or more of the big-five Canadian banks. That’s mainly because of the banks’ importance to Canada’s economy. However, each of the big five banks have different objectives, so they’re not all suitable for every investor.
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Dividend paying stocks: Scotia is Canada’s most international bank
In our view, your goal, particularly if you’re a conservative investor, is to make an attractive return on your investments over a period of years or decades.
Diebold Inc., symbol DBD on New York, is a leading maker of automated teller machines (ATMs). It also makes safes, vaults and building-security systems. Diebold recently raised its quarterly dividend by 3.7%, to $0.28 a share from $0.27. The dividend stock’s new annual rate of $1.12 yields 3.5%. The company has raised its dividend each year for the past 58 years. The company earned $2.5 million, or $0.04 a share, in the three months ended March 31, 2011. That’s down sharply from $24.9 million, or $0.37 a share, a year earlier. If you exclude costs related to the dividend stock’s restructuring and other one-time items, earnings per share fell 32.4%, to $0.23 from $0.34....