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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Thomson’s sound balance sheet will let it keep developing new products, particularly ones it can deliver over the Internet or through mobile devices. As of June 30, 2015, the company held cash of $1.1 billion, or $1.44 a share. Its long-term debt of $7.0 billion is a manageable 21% of its market cap.
The stock has gained 30% in the past year and now trades at 20.5 times Thomson’s likely 2015 earnings of $2.03 a share. That’s still an acceptable multiple in light of its high market share, unique products and improving profit margins. The $1.34 dividend yields 3.2%.
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The company also wants to sell $600 million worth of less important assets. It will use the cash to pay down its debt of $1.9 billion, which is a high 2.1 times its market cap.
Meanwhile, Pengrowth continues to benefit from its hedging program, which locks in selling prices above today’s low oil and gas prices. That should help it keep paying monthly dividends of $0.02 a share. The annual rate of $0.24 yields a high 14.0% due to the stock’s depressed price.
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These sales cut its daily output by 21.0% in the three months ended June 30, 2015, to 388,700 barrels a day (67% gas, 33% oil and natural gas liquids) from 491,800 a year earlier. As well, the company’s realized gas prices, which include the benefit of hedging contracts, fell 13.7%, while oil prices dropped 37.0%.
As a result, Encana lost $167 million, or $0.20 a share (all amounts except share price and market cap in U.S. dollars). A year earlier, it earned $171 million, or $0.23. Cash flow per share dropped 75.3%, to $0.22 from $0.89, while revenue declined 47.7%, to $830 million from $1.6 billion.
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Refining supplies the remaining 65% of Cenovus’s revenue. The company ships its oil to its 50%-owned refineries in Illinois and Texas. Phillips 66 (New York symbol PSX) owns the other 50% of these operations. Cenovus’s refineries help cut its exposure to falling oil prices, as cheaper crude lowers their operating costs.
Cenovus still plans to spend $1.8 billion to $2.0 billion on expansions and upgrades in 2015, unchanged from its previous estimate. These projects should add 50,000 barrels a day to its production by the end of 2016.
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Lower oil and gas prices cut these properties’ contribution to just 39% of Suncor’s revenue and 31% of its earnings in the three months ended June 30, 2015.
However, low oil prices are a plus for Suncor’s four refineries and 1,500 Petro-Canada gas stations. As a result, these businesses supplied 61% of revenue and 69% of earnings.
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The drop was largely because SNC ran into unstable soil while building a mass-transit project, which increased its costs. Expenses at a separate highway project were also higher than expected, further hurting its earnings.
However, revenue jumped 32.7%, to $2.25 billion from $1.7 billion, thanks to U.K.-based Kentz, which SNC bought in August 2014. Kentz provides engineering and construction services to the oil and gas industry and now supplies a third of SNC’s revenue.
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