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
ENCANA CORP. $30 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 736.2 million; Market cap: $22.1 billion; Price-to-sales ratio: 1.8; Dividend yield: 2.8%; SI Rating: Average) is one of North America’s largest natural-gas producers. The company prefers to focus on large unconventional reserves, including shale gas, which is natural gas that is trapped in rock formations. To extract it, companies must pump water and chemicals into the rock. This fractures the rock and releases the natural gas. At current production rates, Encana’s proved reserves should last 12 years. However, these properties could last 50 years if you include harder-to-reach reserves. Despite weak gas prices, Encana plans to double its gas production over the next five years. That would help raise its market share, because low gas prices have prompted many of its competitors to cut production....
Regardless of whether you follow an aggressive or conservative investing approach, we continue to recommend that you own shares of at least two of Canada’s big-five banks — Bank of Montreal, Royal Bank, CIBC, TD Bank and Bank of Nova Scotia. However, banks shouldn’t be the extent of your Canadian financial holdings. To increase your profits and cut your risk, it is also essential to diversify your holdings within each economic sector — including Canadian finance. Other types of financial investments, such as non-bank financial companies, should also play a role in your portfolio.
High-quality non-bank financials could be big winners in the ongoing recovery
...
Ottawa’s new tax on income trusts comes into effect just over four months from now, on January 1, 2011. When it does, it will put trusts on an equal footing with regular corporations. Right now, income trusts pay out a high percentage of their cash flows to their unitholders. This lets them avoid paying corporate taxes. It also gives many of them significantly higher yields than a lot of dividend-paying common stocks. Many income trusts have already converted to conventional corporations in response to the new tax, or plan to do so later in 2010 or in early 2011. Others will continue to operate as trusts....
Apple Inc. (symbol AAPL on Nasdaq) continues to see strong sales of its iPad tablet computer: in April and May of 2010, the company sold 2 million of these devices. At this rate, Apple should sell many more iPads than the 6 million it was expected to sell in the first year. As well, Apple is now selling the iPad outside the U.S. That should further push up sales.
Dividend paying stocks that provide content offer lower-risk iPad profits
...
Smartphones have become increasingly popular in recent years. Aside from functioning as mobile phones, these devices have many computer-like functions, including Internet access and email. There are a couple of ways for investors to profit from rising use of smartphones. The obvious approach is to buy shares of companies that make these devices. Apple and Research in Motion are the most dominant smartphone makers. However, other firms, such as Motorola, Palm and Garmin, have introduced new smartphones in recent months, as well. Another way to profit from rising use of smartphones and other wireless devices is by holding stocks of wireless carriers. Many of these firms have more revenue sources than smartphone makers. Aside from wireless operations, they may provide traditional phone, Internet and television services. This diversity lowers their reliance on a single device. In addition, they get continuing revenue from their customers. This cuts their risk....
We continue to think investors will profit most — and with the least risk — by buying shares of well-established companies with strong business prospects and strong positions in healthy industries. (In the current issue of Canadian Wealth Advisor, our newsletter for the conservative investor, we update our buy/sell/hold advice on a well-established company that has risen over 36% for us in the past year — and could go even higher. Read on for further details.) That’s not to say that there won’t be surprises that affect every company in a particular industry. But well-established, safety-conscious stocks have the asset size and the financial clout — including solid balance sheets and strong cash flow — to weather market downturns or changing industry conditions. That makes them good picks for a conservative investor....
Dividend reinvestment plans, or DRIPs, let shareholders reinvest dividends to buy additional shares (or fractions of shares) of the company. DRIPs bypass brokers, so shareholders save on commissions. DRIPs also eliminate the nuisance of depositing or reinvesting small cash dividend cheques. As well, many DRIPs allow optional commission-free share purchases on a monthly or quarterly basis. (Dividend reinvestment plans are just one of the many investment topics we cover in our free report, Canadian Stock Market Basics: How to Trade Stocks and Make Good Investments in Canada. Click here to download your copy right away.)...
Canadian Pacific Railway (symbol CP on Toronto) has long been a cornerstone of the Canadian economy. CP was incorporated on February 16, 1881. The company began cross-Canada train service after the rail link to the Pacific coast was famously completed with the driving of the “last spike” at Craigellachie, British Columbia, on November 7, 1885. Prime Minister John A. MacDonald’s government built the rail line to satisfy a condition of British Columbia’s entry into Confederation in 1871....
We’ve long recommended that all Canadian investors own two or more of the country’s big five bank stocks. That’s mainly because of their importance to Canada’s economy. As well, investors continue to underestimate them. As a result, they consistently trade at below-average price-to-earnings ratios. (In the latest issue of The Successful Investor, we’ve published a special analysis of all five of Canada’s big bank stocks. One of the banks, CIBC, pays an especially attractive 4.9% dividend yield — and it could be poised for further increases. Read on for full details.)
Canada’s big five bank stocks look set to resume dividend hikes
...
Investors generally look to aggressive stocks for capital gains and to more conservative stocks, like utilities, for income. However, there are some aggressive stocks that pay dividends that are as high — or even higher — than more established companies. (We’ve updated our buy/sell/hold advice on a high-dividend aggressive stock in a just-published issue of Stock Pickers Digest. See below for further details.)