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 MONTREAL $69 (Toronto symbol BMO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 500.0 million; Market cap: $34.5 billion; SI Rating: Above average) is the fourth-largest bank in Canada, with $356.5 billion in assets. The bank has roughly 1,200 branches in Canada, and aims to add at least 15 branches in fiscal 2007 as part of a new restructuring plan. That should help it regain some of the business it lost to other banks in the past few years. It’s also reducing some of its back office staff. The restructuring should eventually cut its annual expenses by $300 million a year. However, problems at its commodities trading operations led to a $327 million loss on some natural gas futures contracts. Bank of Montreal is currently working to cut the risk of its trading portfolio, so further charges are possible....
TORONTO-DOMINION BANK $72 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 719.9 million; Market cap: $51.8 billion; SI Rating: Above average) is the third-largest bank in Canada, with assets of $396.7 billion. It operates over 1,000 branches in Canada. Like Royal, TD is expanding in the United States. It recently paid $3.2 billion U.S. for the 41% of subsidiary TD Banknorth that it did not already own. Banknorth operates about 600 branches in the U.S. northeast. It has struggled lately in the face of strong competition from larger banks. TD has a long history of successfully integrating acquisitions. Owning all of Banknorth should make it easier for it to close under-performing branches and cut credit losses....
BANK OF NOVA SCOTIA $51 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 990.0 million; Market cap: $50.5 billion; SI Rating: Above average) ranks second among Canada’s five big banks, with assets of $411.7 billion. It has over 1,000 branches and offices in Canada. In the past few years, Bank of Nova Scotia has focused on building up its operations in developing markets such as Latin America and Asia. International operations now provide 30% of its income. Demand for banking services is growing strongly in these regions as economic reforms take hold. Bank of Nova Scotia’s expertise gives it an edge over domestic banks in these countries. It lets the bank quickly improve its market share and profits. Recent overseas expansion includes the purchase of 24% of Thailand’s eighth-largest bank, and the opening of four new branches in Malaysia....
ROYAL BANK OF CANADA $56 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.3 billion; Market cap: $72.8 billion; SI Rating: Above average) is the largest of Canada’s big five banks, with total assets of $589.1 billion. It provides a wide range of financial services through over 1,300 branches in Canada, and 34 other countries. International operations account for 10% of Royal’s total revenue. Royal sees limited opportunities in Canada, so it has used acquisitions in the U.S. to fuel its growth in the past few years. Its U.S. retail banking operation, RBC Centura, now operates 270 branches in six southeast states. RBC Dain Rauscher is one of the top full-service brokerage firms in the U.S., with over 670,000 clients....
RIOCAN REAL ESTATE INVESTMENT TRUST $25 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 208.0 million; Market cap: $5.4 billion; SI Rating: Average) manages over 200 retail properties in Canada. It specializes in big-box style outdoor malls with plenty of parking space. RioCan is slowly cutting its exposure to pure retail properties. For example, it recently formed a joint venture with two seniors housing REITs to build a new mixed-use complex in Mississauga, Ontario. It’s also building a retail/residential development in Toronto. The trust recently completed the largest acquisition in its history. In February 2007, it paid $223 million for a major office/retail complex in midtown Toronto. Thanks to strong growth in the surrounding neighbourhoods, RioCan feels that the retail component of this complex (25% of total area) will become a major contributor to its future cash flow....
LOBLAW COMPANIES LTD. $50 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 274.2 million; Market cap: $13.7 billion; SI Rating: Above average) is Canada’s largest supermarket operator, with over 1,500 stores under several banners including Loblaws, No Frills and Provigo. In the past few years, Loblaw has re-modeled many of its stores to handle a wider selection of non-food merchandise, such as clothing and household goods. The company felt these moves would help it compete with Wal-Mart, which is now carrying more grocery items in its stores. As part of the plan, Loblaw also restructured its warehousing and distribution, but this is taking longer than forecast and has led to shortages at some stores. Loblaw now plans to cut its non-food merchandise, and streamline its inventory systems....
CANADIAN TIRE CORP. $79 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.5 million; Market cap: $6.4 billion; SI Rating: Above average) operates 468 retail stores that specialize in automotive, household and sporting goods. It also operates gas stations, casual clothing stores (Mark’s Work Wearhouse) and auto parts stores (PartSource). Most of the company success in the past few years is due to a major upgrade of its stores that made them more attractive to shoppers. Thanks to this plan, income before unusual items in the first quarter of 2007 grew 24.2%, to $0.82 a share from $0.66. Revenue rose 5.9%, to $1.8 billion from $1.7 billion. These re-modeled stores now account for 78% of Canadian Tire’s total chain. The company now plans to base all of its new stores on its Concept 20/20 format, which features better lighting and wider aisles than its older store designs. The format is also more flexible, so local store managers quickly replace slow-selling goods with faster-selling merchandise....
MANITOBA TELECOM SERVICES INC. $49 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 65.1 million; Market cap: $3.2 billion; SI Rating: Average) is Canada’s third-largest telephone company, after BCE and Telus. It is the leading provider of local, long distance and wireless telephone service in Manitoba, with over 90% of the market. Other services include Internet access and a digital TV service. Manitoba Tel’s revenue fell from $909.2 million in 2002 to $824.0 million in 2003. In June 2004, the company paid $1.6 billion for Allstream Inc., a national provider of telecom services to businesses. The purchase doubled the company’s size, and cut its reliance on Manitoba. This business now accounts for 55% of its total revenue. The Allstream acquisition pushed revenue up to $2.0 billion in 2005. Growing competition cut revenue in 2006 to $1.9 billion....
TIM HORTONS INC. $34 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 190.1 million; Market cap: $6.5 billion). Tim Hortons mainly went public due to hedge-fund pressure on its former corporate parent. In contrast, all too many new issues only come to market because the company or its insiders feel it’s a good time to sell, and that’s rarely a good time for you to buy. Tim Hortons has risen 26% for us and we continue to see it as a buy.
IMPERIAL OIL LTD. $43 (Toronto symbol IMO; Conservative Growth Portfolio, Resources sector; Shares outstanding: 939.6 million; Market cap: $40.4 billion; SI Rating: Average) is Canada’s largest integrated oil company, with major producing properties in Western Canada. It also operates nearly 2,000 retail gas stations under the “Esso” banner. ExxonMobil Corp. owns 69.6% of the stock. In the first three months of 2007, Imperial’s profits grew 37.3%, to $0.81 a share (total $774 million) from $0.59 a share ($591 million) a year earlier. If you exclude a gain on the sale of an asset, income in the latest quarter rose 25.4%, to $0.74 a share, mostly due to higher oil production and prices. Cash flow per share rose 8.9%, to $0.98 from $0.90, while revenue crept up to $5.9 billion from $5.8 billion. A fire at Imperial’s refinery in Nanticoke, Ontario cut its output in the first quarter. But the shortage pushed up retail gas prices in Ontario, which helped offset the lost production....