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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IMPERIAL OIL LTD. $119 (Toronto symbol IMO; SI Rating: Average) is Canada’s biggest producer of oil and natural gas. It also operates a nationwide chain of retail gasoline stations under the “Esso” banner. U.S.-based ExxonMobil Corp. owns 69.9% of Imperial. Production at many of Imperial’s mature properties in Western Canada is dropping, so it’s investing heavily in new sources of oil. It owns 25% of the massive Syncrude oil sands joint venture in Northern Alberta. Syncrude is now expanding and it’s hard to predict costs in complex projects like this. For instance, Syncrude’s latest upgrades will cost twice their original forecast. Imperial is also building its own oil sands project at Kearl Lake for $6.5 billion, although ExxonMobil will share some of the cost. That’s more than three times the $2.05 billion or $5.74 a share that Imperial earned in 2004. The company aims to start work on the project in 2007, and begin production in 2010....
CANADIAN TIRE CORP., LTD. $69 (Toronto symbol CTR.NV; SI Rating: Above average) is best known for its 459 Canadian Tire retail stores, which carry a unique mix of automotive, home improvement and sporting goods. The company also sells its goods over the Internet. Other operations include Canada’s largest independent chain of gasoline stations, consisting of 253 gas bars, 242 convenience stores and kiosks and 65 car washes, plus the Mark’s Work Wearhouse chain of 335 casual clothing stores. In 1994, Canadian Tire began replacing its traditional stores with “New-Format” stores, which are bigger and better lit. The company later refined this design into the “Concept 20/20" store, whose more flexible layout lets stores carry more fast-selling merchandise. Concept 20/20 stores also feature other innovations, such as a central customer service counter and improved signage....
TORSTAR CORP. $22 (Toronto symbol TS.NV.B, SI Rating: Above average) publishes The Toronto Star, Canada’s largest daily newspaper. It also publishes daily and weekly papers throughout Ontario, and operates news and information Internet sites. Torstar also owns Harlequin Enterprises, the world’s largest publisher of romance fiction titles. Newspapers provide two-thirds of Torstar’s revenue, and about 55% of its profit. In the three months ended September 30, 2005, Torstar earned $0.30 a share (total $23.7 million), more than double the $0.14 a share ($11.3 million) it made a year earlier. The most recent quarter included a $0.10 a share gain on the sale of excess land in Toronto, and $0.11 in other non-recurring gains. Revenue grew 3.8%, to $380.6 million from $366.5 million, as gains from its community newspapers and Harlequin book publishing division offset lower revenue at its daily newspapers. The company aims to cut its reliance on newspaper ads by expanding elsewhere. It has agreed to buy 20% of Bell Globemedia, the owner of The Globe and Mail, CTV Television and several other media properties, for $283 million. It recently paid $3 million U.S. for an undisclosed minority stake in U.S.-based LiveDeal.com, which provides free online classified ads....
THOMSON CORP. $41 (Toronto symbol TOC; SI Rating: Above average) provides a wide range of specialized information to financial, medical, legal and scientific professionals, mainly through electronic channels such as the Internet. Unlike Torstar and Transcontinental, Thomson gets only a small portion of its revenue from ads. In the third quarter of 2005, Thomson earned $0.46 a share (total $302 million) from ongoing operations, down 8.0% from $0.50 ($328 million) a year earlier (all amounts except share price in U.S. dollars). If you exclude one-time items, Thomson’s per-share earnings grew 8.5%, to $0.51 from $0.47. Revenue grew 9.1%, to $2.4 billion from $2.2 billion....
TRANSCONTINENTAL INC. $19 (Toronto symbol TCL.SV.A; SI Rating: Average) is the seventh-largest commercial printing firm in North America. It also publishes newspapers and magazines, distributes flyers and other advertising materials, and operates several Internet sites. In the past few years, two-thirds of Transcontinental’s growth has come from its aggressive acquisition strategy. But under a new long-term plan, Transcontinental will probably make fewer acquisitions, and build up its existing operations. For example, Transcontinental plans to offer its printing customers more advisory services and special ad packages, in its publications and online. It hopes to make their ads effective, cut their costs, and generate added revenue....
CANADIAN IMPERIAL BANK OF COMMERCE $76 (Toronto symbol CM; SI Rating: Above average) is Canada’s fifth-largest bank with $280.4 billion in assets. In August 2005, the bank set aside $2.8 billion (or $7.45 a share) to cover various lawsuit settlements related to its dealings with bankrupt U.S. energy trading firm Enron Corp. The charge wiped out about 20% of CIBC’s shareholders’ equity. It also forced it to suspend stock buybacks, and freeze its $2.72 dividend, which yields 3.6%. CIBC now hopes that its new restructuring plan will cut its annual operating expenses by $250 million, which would bring its costs in line with the other big banks....
BANK OF MONTREAL $63 (Toronto symbol BMO; SI Rating: Above average) is the fourthlargest Canadian bank, with assets of $297.5 billion. The bank earned $1.27 a share (total $657 million) in its fourth fiscal quarter ended October 31, 2005, up 19.8% from $1.06 ($551 million) a year earlier. The latest results include $43 million in one-time gains from the sale of its U.S. online banking business and other assets; the year-earlier period includes $24 million in non-recurring gains. Revenue in the quarter rose 15.2%, to $2.65 billion from $2.3 billion. Strong gains from Canadian operations offset slower growth in the U.S. Bank of Montreal is doing a good job selling investment products and other services to its retail banking customers. However, the bank is recovering fewer loans that it had already written off in prior years. It set aside $57 million for loan losses in the fourth quarter; a year earlier, it cut its total loan loss provisions by $13 million. Although provisions will probably rise in the next year, they’re still well below the peak of the first two years of this decade....
BANK OF NOVA SCOTIA $47 (Toronto symbol BNS; SI Rating: Above average) is Canada’s third-largest bank, with assets of $314.0 billion. In its fourth fiscal quarter ended October 31, 2005, earnings grew 15.9%, to $0.80 a share (total $811 million) from $0.69 ($705 million) a year earlier, due to gains in retail, wealth management and international operations. Excluding onetime items, the bank earned $0.77 a share in the latest quarter. Revenue rose 9.6%, to $2.74 billion from $2.5 billion. In the past five years, Bank of Nova Scotia has spent over $800 million on international acquisitions, mostly in the Caribbean and Latin America. These operations now provide about a third of its net income. This makes it the most international of Canada’s big five banks....
TORONTO-DOMINION BANK $60 (Toronto symbol TD; SI Rating: Above average) is Canada’s second-largest bank, with $365.2 billion in assets. In its fourth fiscal quarter ended October 31, 2005, TD’s earnings fell 8.9% to $0.82 a share (total $589 million) from $0.90 a share ($595 million) a year earlier. If you disregard unusual items, per share earnings improved 16.5%, to $1.06 from $0.91. Revenue rose 19.2%, to $3.1 billion from $2.6 billion. TD feels that U.S. banking offers an opportunity to expand its profits. Last year it paid about $5 billion for a controlling stake in U.S.-based Banknorth Group Inc. (now called TD Banknorth). This subsidiary now plans to pay $1.9 billion U.S. for Hudson United Bankcorp, which operates over 200 branches in the New York City area. Meanwhile, TD plans to sell the U.S. operations of its TD Waterhouse online brokerage to rival Ameritrade. In exchange, TD will receive 32% of Ameritrade. It will also acquire Ameritrade’s Canadian brokerage business for $60 million U.S....
ROYAL BANK OF CANADA $88 (Toronto symbol RY; SI Rating: Above average) is the largest of Canada’s big five banks, with total assets of $469.5 billion. In its fourth fiscal quarter ended October 31, 2005, Royal set aside $591 million to cover possible lawsuit settlements related to its involvement with U.S. energy trader Enron Corp. It also set aside $203 million more to cover costs at its U.S. insurance operations related to three major hurricanes. These charges cut Royal’s net income from continuing operations in the fourth quarter by 21.9%, to $0.82 a share (total $543 million) from $1.05 ($687 million) a year earlier. If you disregard all unusual charges, per-share earnings grew 18.3%, to $1.68 from $1.42. Revenue rose 4.3%, to $4.8 billion from $4.6 billion....