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.
[text_ad use_category="243"]
Read More
Close
CANADIAN NATIONAL RAILWAY CO. $73 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 461.8 million; Market cap: $33.7 billion; Price-to-sales ratio: 4.1; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest freight-rail network, and serves 16 U.S. states. Microsoft co-founder Bill Gates is CN’s largest shareholder, with just over 10% of the shares. In the three months ended March 31, 2011, CN earned $668 million. That’s up 30.7% from $511 million a year earlier. The company spent $340 million on share buybacks in the latest quarter. Because of fewer shares outstanding, earnings per share rose 34.3%, to, $1.45 from $1.08. If you exclude one-time items in both quarters, mainly gains on sales of rail lines in southern Ontario, earnings per share would have risen 12.5%, to $0.90 from $0.80. Revenue rose 6.1%, to $2.1 billion from $2.0 billion....
Verizon Communications Inc., symbol VZ on New York, owns 55% of Verizon Wireless, which is the largest wireless provider in the U.S.; U.K.-based Vodafone plc owns the other 45%. This business has 104 million customers in 50 states, and accounts for 63% of Verizon’s revenue. The remaining 37% comes from its wireline division, which sells local and long-distance telephone service to over 25 million customers in 28 states. The high dividend stock’s annual payout rate is $1.95 a share, for a yield of 5.2%. In the three months ended March 31, 2011, Verizon earned $0.51 per share, up 218.8% from $0.16 a year earlier. If you exclude costs related to the spinoff of a subsidiary and other unusual items in the year-earlier quarter, earnings per share would have risen 6.3%. Sales rose just 0.3%, to $27.0 billion from $26.9 billion a year earlier....
If you’ve been following our TSINetwork.ca Daily Updates, or subscribe to one or more of our newsletters and investment services, you’re likely familiar with our three-part investment advice. A key part of that advice is to invest mainly in well-established dividend-paying stocks. (The other two parts are to downplay stocks in the broker/media limelight and spread your money across the five main economic sectors: Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities.) 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). Dividend paying stocks are responding by doing their best to maintain, or even increase, their payouts....
TRANSCONTINENTAL INC. $15 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 81.0 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.9%; TSINetwork Rating: Average; www.transcontinental.com) is the largest commercial printer in Canada and Mexico, and the fourth-largest in North America. It also publishes newspapers and magazines. Transcontinental also has over 250 web sites. These web sites will become more important to its growth in the next few years, as advertisers spend more on the Internet than print products. In the first quarter of fiscal 2011, which ended January 31, 2011, Transcontinental earned $29.9 million, or $0.37 a share. That’s up 10.3% from $27.1 million, or $0.34 a share, a year earlier. These figures exclude writedowns and other non-recurring items. Revenue rose 3.6%, to $530.1 million from $511.6 million....
TORSTAR CORP. $15 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.1 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.torstar.com) publishes The Toronto Star, which is Canada’s largest daily newspaper by circulation. The company also publishes three other daily newspapers and over 100 weeklies, mainly in southern Ontario. Newspapers account for about 70% of Torstar’s revenue, and 60% of its earnings. The company’s other main business is wholly owned Harlequin Enterprises Ltd., the world’s leading publisher of romance novels. Torstar recently received $291.6 million from the sale of its 20% stake in CTVglobemedia to BCE Inc. (Toronto symbol BCE). This business owns CTV Television and other broadcasting businesses....
TRANSCANADA CORP. $39 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 699.5 million; Market cap: $27.3 billion; Price-to-sales ratio: 3.4; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.transcanada.com) operates a 60,000-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. TransCanada also owns, or has interests in, over 10,900 megawatts of power generation. That includes Bruce Power LP, a nuclear facility in Ontario, and the Ravenswood facility, which serves New York City. TransCanada has spent about $10 billion of the $20 billion it has set aside for new growth projects. It will spend the remaining $10 billion over the next two years. Its biggest project is the Keystone pipeline, which it is building in three phases. Keystone’s first phase is now pumping crude oil from Alberta to refineries in Illinois. The second phase will extend to Oklahoma, and should be ready in 2011. The third phase, called Keystone XL, will pump oil to refineries in Texas. U.S. environmentalists and politicians have criticized this project. Even so, TransCanada aims to finish Keystone XL by the end of 2013....
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. Chemtrade has three divisions: the Sulphur Products and Performance Chemicals division supplies 54.5% of the income trust’s revenue. Pulp Chemicals accounts for 8.5% of revenue. The International division supplies the remaining 37.0%. This division removes and markets sulpur and sulphuric acid outside of North America. In the three months ended December 31, 2010, the income trust’s cash flow per unit fell 31.7%, to $0.28 from $0.41 a year earlier. This was partly due to reduced production from a few of its larger sulphuric-acid plants, especially the plant in Beaumont, Texas, which had been damaged by a fire in 2008. That plant was shut down for half of the fourth quarter, forcing the company to use higher-cost supply sources and routes to make deliveries to customers....
We’ve long recommended that all Canadian investors own two or more of the big five Canadian bank stocks. That’s mainly because of their importance to Canada’s economy. Like most stocks, the top five banks slumped deeply during the 2007-2009 market downturn and financial crisis. But since the market turnaround of March 2009, several of the top five have recovered and gone on (at least briefly) to all-time highs. Few other stock groups have done as well. (In a recent Successful Investor Hotline, we updated our buy/sell/hold advice on Toronto-Dominion Bank, which is the second biggest of the big-five Canadian bank stocks, after Royal Bank. Read on for further details.)...
Investors generally look to aggressive stocks for capital gains and to more conservative stocks, like utilities, for income. However, there are some aggressive Canadian dividend paying stocks whose payouts are as high — or even higher — than more established companies. (We updated our buy/sell/hold advice on a high-dividend aggressive stock in the February 25, 2011, Stock Pickers Digest hotline. See below for further details.)
Dividends are a plus in aggressive investing — but focus on quality
...
Buckeye Partners L.P., symbol BPL on New York, operates over 8,700 kilometres of pipelines in the northeastern and midwestern U.S. These lines pump gasoline, jet fuel and other petroleum products. Buckeye also owns oil and natural-gas storage terminals and other related businesses. Buckeye is one of the income investing picks we analyze in Wall Street Stock Forecaster. In 2010, Buckeye’s revenue jumped 78.0%, to $3.2 billion from $1.8 billion in 2009. The gain mostly reflects the company’s recent acquisition of oil pipelines and storage terminals. In addition, the company is transporting more fuel due to the improving economy. Rising oil prices have also pushed up the company’s fee income....