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
INCO LTD. $54 (Toronto symbol N) struggled as the Asian economic crisis led to lower nickel demand and prices. In light of the bleak outlook, it seemed that Inco overpaid for the huge Voisey’s Bay nickel deposit in Labrador. The Newfoundland government’s demand that Inco build a smelter in the province to process the ore also threatened the project’s feasibility. The high cost of the Voisey’s Bay purchase also forced Inco to quit paying dividends. But spreading prosperity around the world has spurred nickel demand and prices. That helped make it economical for Inco to build a smelter in Newfoundland. Voisey’s Bay began operations in 2005....
SOBEYS INC. $38 (Toronto symbol SBY; SI Rating: Average) is Canada’s second-largest food seller, with 1,300 stores under the Sobeys, IGA and Price Chopper banners. The company owns roughly a third of its stores; franchisees own the remaining two-thirds. The Sobey family controls 68% of the company’s stock. Like Loblaw, Sobeys used non-food items and in-store services such as pharmacies and bakeries to drive its growth. Sales rose from $9.2 billion in 2001 (fiscal years end April 30) to $12.2 billion in 2005. Earnings before unusual items grew from $1.50 a share (total $91.2 million) in 2001 to $2.85 a share ($186.7 million) in 2005. Also like Loblaw, Sobeys has invested heavily in new stores, and developed its own private label brand (“Compliments”). It’s also streamlining its distribution network by closing some facilities and expanding others....
LOBLAW COMPANIES LTD. $58 (Toronto symbol L; SI Rating: Above average) is Canada’s largest supermarket operator, with over 1,600 company-owned and franchised stores. The company also distributes food and other goods to independent retailers. George Weston Ltd. owns 63% of the company. Loblaw’s revenue grew from $21.5 billion in 2001 to $26.2 billion in 2004, as the company expanded the amount of non-food items in its stores, such as clothing and housewares. It also offered more services like dry cleaning. These moves also fueled its profit growth, from $2.04 a share (total $563 million) in 2001 to $3.48 a share ($968 million) in 2004. In 2005, Loblaw launched a new strategy aimed at protecting its market share, and keeping its costs low. The main thrust of this plan is an overhaul of its warehouse distribution network, including closing six of its 32 distribution centres....
DUNDEE CORP. $33 (Toronto symbol DBC.SV.A; SI Rating: Average) holds equity interests in several businesses. Its main asset is its 63% stake in Dundee Wealth Management Inc., which sells investments, life insurance and other financial services through about 4,000 independent advisors across Canada. Through 86%-owned Dundee Realty Corp., Dundee invests in commercial and residential real estate developments in Canada and the United States. It also invests in junior resource companies. In the three months ended September 30, 2005, Dundee earned $0.24 a share (total $6.4 million), down 56.4% from $0.55 a share ($14.4 million) a year earlier. But the latest results included a $5.0 million pre-tax charge related to Dundee’s plan to upgrade the computer systems of its brokerage operations. Revenue fell 7.7%, to $205.7 million from $222.8 million, mostly due to lower revenue from its real estate division, following last year’s sale of a condominium project. Investors tend to avoid Dundee for several reasons, including its complex holding company structure and dual-class shares....
IGM FINANCIAL CORP. $46 (Toronto symbol IGM; SI Rating: Above average) sells mutual funds and other financial services through three main divisions: Investors Group, Mackenzie Financial and Investment Planning Council. IGM is currently Canada’s largest mutual fund company, with $94.1 billion in mutual fund assets under management. Power Financial Corp. owns 56% of IGM. In the third quarter of 2005, IGM earned $0.66 a share, up 13.8% from $0.58 a year earlier. Revenue grew 11.4%, to $587.0 million from $527.1 million, as improving equity markets fueled demand for mutual funds. Mutual fund sales should continue to rise in 2006, particularly during the busy RRSP season in the first two months of the year, which accounts for over half of the mutual fund industry’s annual sales....
GREAT-WEST LIFECO INC. $29 (Toronto symbol GWO; SI Rating: Above average) is Canada’s largest insurance company, with assets under administration of $174.1 billion. Power Financial Corp. owns 75% of the company’s stock. In the three months ended September 30, 2005, Great-West earned $421 million, up 1.7% from $414 million a year earlier. However, per-share income remained unchanged at $0.47 a share. If you exclude a restructuring charge and extra provisions for claims related to hurricanes in the United States, the company would have earned $0.51 a share in the most recent quarter. Revenue rose 5.1%, to $5.2 billion from $4.95 billion. Most of Great-West’s recent earnings growth comes from its Canadian operations (45% of revenue), mainly due to expense reductions following the acquisition of rival insurer Canada Life Financial in 2003. So far, Great-West has cut its annual costs by $407 million. That’s 23% ahead of its original target. It should finish absorbing these operations in early 2006, and ultimately save $420 million....
MOLSON COORS BREWING CO. $63 (New York symbol TAP; WSSF Rating: Average) has agreed to sell 68% of Kaiser, its money-losing brewery in Brazil, for $68 million in cash. The buyer has also agreed to assume $60 million of Kaiser’s debt. To put these figures in perspective, the company earned $112.6 million or $1.44 a share in the nine months ended September 25, 2005. Following the sale, Molson Coors will still own 15% of Kaiser. That will help make it easier for the company to someday launch its Coors Light brand in Brazil. The stock recently fell $6 after the company said that strong competition from low-priced beers and rising energy and other costs will cut Molson Coors profits in the fourth quarter of 2005, and possibly part of 2006....
PENGROWTH ENERGY TRUST (Toronto symbols PGF.A $28 and PGF.B $23; SI Rating: Average) owns all or part of several oil and gas properties in Alberta and B.C. Properties that Pengrowth operates account for 55% of its production. The remaining 45% comes from minority investments in other energy projects, including an 8.4% interest in the Sable Offshore Energy Project south of Nova Scotia. Pengrowth prefers to focus on proven properties with sizeable reserves. It also sticks mainly to conventional oil and gas properties, instead of more risky types of investments like oil sands. Conventional assets supply 80% of Pengrowth’s production, while heavy oil and natural gas liquids supply the other 20%. That gives it more stable cash flows, and keeps its operating costs down. Due to bad weather and a shortage of drilling equipment, Pengrowth’s capital spending in 2005 fell slightly, to around $1.15 a unit. Since Pengrowth will shift most of this work to 2006, capital spending will likely rise to roughly $1.45 a unit....
LEGACY HOTELS REAL ESTATE TRUST $8.05 (Toronto symbol LGY.UN; SI Rating: Extra risk) owns 24 luxury hotels with over 10,000 guestrooms in Canada and the United States, including The Fairmont Royal York in Toronto and the Fairmont Le Château Frontenac in Quebec City. Fairmont Hotels & Resorts Inc. (see box) owns roughly 24% of Legacy, and manages all of Legacy’s hotels. In the third quarter of 2005, Legacy earned $0.19 a unit, up 46.2% from $0.13 a year earlier, while cash flow per unit rose 26.8%, to $0.38 from $0.30. Revenue grew 5.9%, to $221.6 million from $209.3 million, as a 3.6% rise in occupancy offset a slight drop in the average daily room rate. Legacy’s Canadian hotels get about a third of their revenue from foreign travelers, mainly from the United States. The 8% rise in the Canadian dollar against the U.S. dollar in the first nine months of 2005 has hurt the flow of U.S. tourists to Legacy’s hotels, and cut into its revenue....
RIOCAN REAL ESTATE INVESTMENT TRUST $23 (Toronto symbol REI.UN; SI Rating: Average) owns or invests in over 200 retail properties in Canada, mainly large, outdoor suburban malls. Ontario and Quebec account for roughly 80% of its revenue. In the three months ended September 30, 2005, RioCan earned $0.22 a unit (total $41.8 million) from continuing operations, up 4.8% from $0.21 a unit ($39.1 million) a year earlier. Cash flow rose 2.6%, to $56.1 million from $54.7 million. But cash flow per unit fell to $0.29 from $0.30 due to more units outstanding. Revenue grew 8.6%, to $149.8 million from $138.0 million. In the past few years, RioCan has steadily sold older or smaller properties so it can focus on properties with greater earning potential, such as “Big Box"-style stores. Thanks to this strategy, the trust has leased nearly 97% of its available space. National chains like Loblaw, Wal-Mart and Canadian Tire accounted for 81.5% of RioCan’s rental revenue at September 30, 2005, up from 80.7% at the end of 2004....