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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GREAT-WEST LIFECO $36.60 (Toronto symbol GWO; Shares outstanding: 993.2 million; Market cap: $36.4 billion; TSINetwork Rating: Above Average; Yield: 3.8%; www.greatwestlifeco.com) is one of Canada’s largest insurance firms. The company also offers mutual funds and wealth management services. Power Financial owns 67.2% of Great-West. In the past few years, the insurer has expanded its presence in Ireland. In July 2013, it paid $1.75 billion for Irish Life, that country’s largest pension manager and life insurance provider. Irish Life has now announced two purchases: it is buying Aviva Health, and increasing its stake in GloHealth from 49% to 100%....
RIOCAN REIT $27.17 (Toronto symbol REI.UN; Units outstanding: 322.4 million; Market cap: $8.8 billion; TSINetwork Rating: Average; Dividend yield: 5.2%; www.riocan.com) formed a 50/50 joint venture in July 2012 with ALLIED PROPERTIES REIT $35.35 (Toronto symbol AP.UN; Units outstanding: 78.5 million; Market cap: $2.8 billion; TSINetwork Rating: Extra Risk; Dividend yield: 4.2%; www.alliedreit.com). Their goal was to purchase buildings in urban areas and “intensify” their revenue and cash flow, mainly by adding tenants. RioCan manages the retail portion of these developments, while Allied handles the office portion. The partners own the King-Portland Centre in downtown Toronto, among others. They are now building a new office/retail structure on the site. This week, online shopping firm Shopify Inc. agreed to become the anchor tenant for the building. RioCan and Allied expect to complete this project in 2018....
BCE INC. $59.10 (Toronto symbol BCE; Shares outstanding: 868.1 million; Market cap: $50.8 billion; TSINetwork Rating: Above Average; Dividend yield: 4.6%; www.bce.ca) is Canada’s largest provider of telephone, Internet and wireless services. It also offers satellite and Internet TV across the country. In the three months ended March 31, 2016, the company’s earnings per share rose 1.2%, to $0.85 from $0.84 a year earlier. Revenue increased slightly, to $5.27 billion from $5.24 billion. Revenue from wireless services (30% of the total) rose 5.3% as the company’s network upgrades continued to attract new subscribers. BCE also benefited from the rising use of smartphones. It can charge higher service fees for those devices than for regular cellphones....
TELUS $39.66 (Toronto symbol T; Shares outstanding: 593.3 million; Market cap: $23.4 billion; TSINetwork Rating: Above Average; Dividend yield: 4.6%; www.telus.com) is Canada’s second-largest wireless carrier (behind Rogers Communications) with 8.4 million subscribers. In addition, its wireline division serves 3.1 million landline phone customers in B.C., Alberta and eastern Quebec. This business also has 1.5 million Internet users and 980,000 TV customers. Telus will now extend its reach into Manitoba with BCE’s takeover of Manitoba Tel (see page 33). To satisfy Canadian telecom regulators, BCE plans to sell to Telus about one-third of Manitoba Telecom’s current postpaid wireless accounts, or a block of about 140,000 subscribers. BCE will also transfer one-third of Manitoba Tel’s retail outlets to Telus. In the three months ended March 31, 2016, the company earned $414 million, down 3.0% from $427 million a year earlier. However, earnings per share were unchanged at $0.70, due to fewer shares outstanding. Revenue gained 2.6%, to $3.11 billion from $3.03 billion....
TD BANK $55.77 (Toronto symbol TD; Shares outstanding: 1.9 billion; Market cap: $103.5 billion; TSINetwork Rating: Above Average; Dividend yield: 3.9%; www.td.com) is the first Canadian bank to use Visa’s new tokenization technology in its mobile banking app. This system uses encrypted “tokens” instead of credit card numbers and other account information. That helps protect sensitive client information from online intruders. It also speeds up mobile payments and other transactions. Better security should encourage more of TD’s customers to do their banking online. That would cut its costs as electronic transactions are cheaper to process than those in physical branches....
ENBRIDGE INC. $50.95 (Toronto symbol ENB; Shares outstanding: 924.3 million; Market cap: $47.5 billion; TSINetwork Rating: Above Average; Divd. yield: 4.2%; www.enbridge.com) has received Canadian regulatory approval to replace its Line 3 pipeline, which began operating in the 1960s. It pumps crude oil from Hardisty, Alberta, to Superior, Wisconsin. U.S. regulators have already approved the plan. The project will also enlarge the line’s capacity, from 390,000 barrels a day to 760,000 barrels. Enbridge expects to complete these upgrades by 2019. Regulators have imposed 89 conditions on the project—mainly additional measures to improve safety and environmental protections. But these conditions are unlikely to increase the project’s $7.5 billion cost....
IMPERIAL OIL $40.37 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $34.2 billion; TSINetwork Rating: Average; Dividend yield: 1.5%; www.imperialoil.ca) is raising its quarterly dividend by 7.1% with the July 2016 payment, to $0.15 from $0.14. The company has paid dividends every year for over a century and has increased its annual dividend payment for 21 consecutive years. Imperial Oil is a buy....
CANADIAN PACIFIC RAILWAY $181.49 (Toronto symbol CP; Shares outstanding: 153.0 million; Market cap: $27.8 billion; TSINetwork Rating: Above Average; Dividend yield: 1.1%; www.cpr.ca) has abandoned its plan to merge with U.S.-based railway Norfolk Southern Corp. (New York symbol NSC). Norfolk rejected CP’s latest offer of about $30 billion U.S. in cash and shares. In addition, U.S. transportation regulators probably would have blocked any deal no matter how CP structured the transaction. The company will now use some of the cash it had set aside for the takeover to raise its quarterly dividend by 42.9%, starting with the July 2016 payment. The new annual rate of $2.00 a share yields 1.1%....
PROCTER & GAMBLE CO. $80 (New York symbol PG; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 2.7 billion; Market cap: $216.0 billion; Price-to-sales ratio: 3.0; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.pg.com) is one of the world’s largest makers of household and personal care goods. It began operating in the U.S. in 1837, and now sells its products in over 180 countries. Overseas markets account for 60% of its total sales. The company has five main business lines: fabric and home care products such as Tide laundry detergent (29% of fiscal 2015 sales, 24% of earnings); baby and family care goods, including Pampers diapers (27%, 26%); beauty items such as Olay cosmetics (24%, 23%); grooming products, including Gillette razors (10%, 16%); and health care items such as Crest toothpaste (10%, 11%). Wal-Mart accounts for 14% of the company’s sales. In response to rising competition from generic products, Procter is narrowing its focus from 166 different brands to 65. Of those remaining brands, 21 have annual sales of over $1 billion. Another 11 have annual sales of between $500 million and $1 billion....
GANNETT CO., INC. $18 (New York symbol GCI; Conservative Growth Portfolio, Consumer sector: Shares outstanding: 116.5 million; Market cap: $2.1 billion; Price-to-sales ratio: 0.7; Dividend yield: 3.6%; TSINetwork Rating: Average; www.gannett.com) publishes daily newspapers in 107 U.S. markets, including its flagship newspaper, USAToday. It also has 19 papers in the U.K., and over 200 magazines and other publications. The company has offered to buy Tribune Publishing Co. (New York symbol TPUB). This firm owns 11 daily papers, including the Chicago Tribune and the Los Angeles Times, as well as 160 weekly papers and 120 websites. Including Tribune’s debt, the offer is worth $815 million. Eliminating overlapping operations would let Gannett cut $50 million from its annual costs; it earned $209.1 million, or $1.79 a share, in 2015....