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. $48 (Toronto symbol IMO; Conservative Growth and Income Portfolios, Shares outstanding: 847.6 million; Market cap: $40.7 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.1%; TSINetwork Rating: Average; www.imperialoil.ca) has resumed production at its Kearl oil sands project in northern Alberta.
The company was forced to shut down Kearl due to problems with a machine that separates heavy oil from sand. In the third quarter, Kearl supplied 30% of Imperial’s daily output of 307,000 barrels.
The recent oil-price drop has cut the stock’s price by 17.2% from its August 2014 peak of $58. However, low crude prices will benefit Imperial’s refining and petrochemical operations, which supplied 43% of its earnings in the latest quarter. The company may also take advantage of low prices to pick up new properties at a bargain.
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The company was forced to shut down Kearl due to problems with a machine that separates heavy oil from sand. In the third quarter, Kearl supplied 30% of Imperial’s daily output of 307,000 barrels.
The recent oil-price drop has cut the stock’s price by 17.2% from its August 2014 peak of $58. However, low crude prices will benefit Imperial’s refining and petrochemical operations, which supplied 43% of its earnings in the latest quarter. The company may also take advantage of low prices to pick up new properties at a bargain.
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POTASH CORP. OF SASKATCHEWAN $40 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 829.7 million; Market cap: $33.2 billion; Price-to-sales ratio: 5.4; Dividend yield: 4.0%; TSINetwork Rating: Average; www.potashcorp.com) gets 40% of its revenue and 50% of its earnings from potash, followed by nitrogen (35%, 40%) and phosphate (25%, 10%) fertilizers.
The company sold its potash for an average of $281 U.S. a tonne in the third quarter of 2014, down 8.5% from $307 U.S. a year earlier.
It now expects to sell 9.0 million to 9.2 million tonnes of potash for all of 2014, up from 8.1 million in 2013. However, lower selling prices will cut its earnings to a projected $1.80 U.S. a share from $2.09 U.S. The stock trades at a somewhat high 19.3 times the 2014 estimate. The $1.40 U.S. dividend yields 4.0%.
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The company sold its potash for an average of $281 U.S. a tonne in the third quarter of 2014, down 8.5% from $307 U.S. a year earlier.
It now expects to sell 9.0 million to 9.2 million tonnes of potash for all of 2014, up from 8.1 million in 2013. However, lower selling prices will cut its earnings to a projected $1.80 U.S. a share from $2.09 U.S. The stock trades at a somewhat high 19.3 times the 2014 estimate. The $1.40 U.S. dividend yields 4.0%.
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AGRIUM INC. $109 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 143.7 million; Market cap: $15.7 billion; Price-to-sales ratio: 1.0; Dividend yield 3.3%; TSINetwork Rating: Average; www.agrium.com) gets just 3% of its revenue from potash, so the Russian mine shutdown will have little impact on its short-term earnings.
Agrium’s 1,400 retail stores supply 78% of its revenue. Nitrogen fertilizers it manufactures from natural gas provide the remaining 19%.
Equipment failures have forced the company to shut down its Vanscoy potash mine in Saskatchewan. Agrium is taking advantage of this outage to increase this project’s capacity by 40%.
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Agrium’s 1,400 retail stores supply 78% of its revenue. Nitrogen fertilizers it manufactures from natural gas provide the remaining 19%.
Equipment failures have forced the company to shut down its Vanscoy potash mine in Saskatchewan. Agrium is taking advantage of this outage to increase this project’s capacity by 40%.
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THOMSON REUTERS CORP. $45 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 799.7 million; Market cap: $36.0 billion; Price-to-sales ratio: 2.8; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.thomsonreuters.com) is seeing higher demand for its financial information products for the first time since the 2008 economic crisis. Sales at its legal and tax and accounting businesses are also improving.
In the three months ended September 30, 2014, Thomson’s overall revenue rose 1.1%, to $3.11 billion from $3.07 billion a year earlier (all amounts except share price and market cap in U.S. dollars).
The financial division’s revenue (54% of the total) fell 0.7%. But banks and other clients are buying more products than they’re cancelling, which should raise this division’s future revenue.
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In the three months ended September 30, 2014, Thomson’s overall revenue rose 1.1%, to $3.11 billion from $3.07 billion a year earlier (all amounts except share price and market cap in U.S. dollars).
The financial division’s revenue (54% of the total) fell 0.7%. But banks and other clients are buying more products than they’re cancelling, which should raise this division’s future revenue.
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CANADIAN PACIFIC RAILWAY LTD. $202 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 171.5 million; Market cap: $34.6 billion; Price-to-sales ratio: 5.6; Dividend yield: 0.7%; TSINetwork Rating: Above Average; www.cpr.ca) is down 18.5% from its recent peak of $248, partly due to the drop in oil prices. Even through cheaper crude will cut CP’s fuel costs, investors fear that producers will defer new projects, which could hurt the company’s crude-by-rail volumes.
Oil accounts for just 7% of the company’s revenue, so any production drop would have little impact on its earnings.
Moreover, CP continues to do a good job of cutting its costs. In the third quarter of 2014, its operating ratio improved to 62.8% from 65.9% a year earlier. (Operating ratio is calculated by dividing regular operating costs by revenue. The lower the ratio, the better.)
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Oil accounts for just 7% of the company’s revenue, so any production drop would have little impact on its earnings.
Moreover, CP continues to do a good job of cutting its costs. In the third quarter of 2014, its operating ratio improved to 62.8% from 65.9% a year earlier. (Operating ratio is calculated by dividing regular operating costs by revenue. The lower the ratio, the better.)
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BCE INC. $52 (Toronto symbol BCE; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 839.6 million; Market cap: $43.7 billion; Price-to-sales ratio: 2.1; Dividend yield: 4.8%; TSINetwork Rating: Above Average; www.bce.ca) is buying Glentel Inc. (Toronto symbol GLN), which sells mobile phones and subscription plans through 494 Canadian stores, mainly under under the Wireless Wave banner. Glentel also has 735 U.S. outlets and 147 in Australia and the Philippines.
The company will pay $594 million (50% cash and 50% in BCE common shares) for Glentel’s outstanding shares. If you include Glentel’s debt, the entire deal is worth $670 million. BCE expects to complete it in the first quarter of 2015.
The Glentel stores will keep selling subscription plans from rival wireless carriers. However, BCE feels the new outlets will help it win more customers, particularly as Ottawa now limits mobile contract terms to two years or less.
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The company will pay $594 million (50% cash and 50% in BCE common shares) for Glentel’s outstanding shares. If you include Glentel’s debt, the entire deal is worth $670 million. BCE expects to complete it in the first quarter of 2015.
The Glentel stores will keep selling subscription plans from rival wireless carriers. However, BCE feels the new outlets will help it win more customers, particularly as Ottawa now limits mobile contract terms to two years or less.
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PRECISION DRILLING CORP. $6.31 (Toronto symbol PD; Aggressive Growth Portfolio, Resource sector; Shares outstanding: 292.8 million; Market cap: $1.8 billion; Price-to-sales ratio: 0.8; Dividend yield: 4.4%; TSINetwork Rating: Extra Risk; www.precisiondrilling.com) provides contract drilling services to land-based oil and gas producers, mainly in North America. It operates 335 rigs.
In the quarter ended September 30, 2014, Precision’s revenue rose 19.7%, to $584.6 million from $488.5 million a year earlier. That’s mainly because producers in Western Canada and the U.S. require more rigs that can reach deeper pockets of oil and gas.
Earnings jumped 79.4% in the quarter, to $52.8 million, or $0.18 a share. A year earlier, Precision earned $29.4 million, or $0.10 a share.
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In the quarter ended September 30, 2014, Precision’s revenue rose 19.7%, to $584.6 million from $488.5 million a year earlier. That’s mainly because producers in Western Canada and the U.S. require more rigs that can reach deeper pockets of oil and gas.
Earnings jumped 79.4% in the quarter, to $52.8 million, or $0.18 a share. A year earlier, Precision earned $29.4 million, or $0.10 a share.
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SHAWCOR LTD. $41 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.5 million; Market cap: $2.6 billion; Price-to-sales ratio: 1.6; Dividend yield: 1.5%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings that keep oil and natural gas pipelines from rusting. It also makes industrial products, like electrical wire and protective sheaths.
The company recently sold its 50% stake in a joint venture that operates a pipe-coating facility in Brazil for $29.7 million U.S. It also wrote down the value of its other Brazilian deepwater pipe-coating subsidiary by $28.5 million (Canadian).
As a result, ShawCor’s earnings dropped 92.3% in the third quarter of 2014, to $5.6 million, or $0.09 a share. Without the writedown and other unusual items, it earned $0.51 a share in the latest quarter. A year earlier, the company earned $73.0 million, or $1.21 a share. Revenue fell 10.7%, to $469.6 million from $525.8 million.
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The company recently sold its 50% stake in a joint venture that operates a pipe-coating facility in Brazil for $29.7 million U.S. It also wrote down the value of its other Brazilian deepwater pipe-coating subsidiary by $28.5 million (Canadian).
As a result, ShawCor’s earnings dropped 92.3% in the third quarter of 2014, to $5.6 million, or $0.09 a share. Without the writedown and other unusual items, it earned $0.51 a share in the latest quarter. A year earlier, the company earned $73.0 million, or $1.21 a share. Revenue fell 10.7%, to $469.6 million from $525.8 million.
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FINNING INTERNATIONAL INC. $24 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 172.4 million; Market cap: $4.1 billion; Price-to-sales ratio: 0.6; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.finning.com) is the world’s largest dealer of tractors, bulldozers and trucks made by Caterpillar Inc. (New York symbol CAT). It also sells heavy equipment made by other firms. Finning’s clients are mainly in the mining, forest products and construction industries.
Weaker commodity prices have hurt demand for new gear in Canada and South America. That cut Finning’s earnings by 34.0% in the quarter ended September 30, 2014, to $0.33 a share from $0.50 a year ago. Without one-time items, including charges related to new tax laws in Chile and Argentina, Finning earned $0.50 a share in the latest quarter.
Overall revenue fell 6.2%, to $1.7 billion from $1.8 billion a year earlier.
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Weaker commodity prices have hurt demand for new gear in Canada and South America. That cut Finning’s earnings by 34.0% in the quarter ended September 30, 2014, to $0.33 a share from $0.50 a year ago. Without one-time items, including charges related to new tax laws in Chile and Argentina, Finning earned $0.50 a share in the latest quarter.
Overall revenue fell 6.2%, to $1.7 billion from $1.8 billion a year earlier.
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SNC-LAVALIN GROUP INC. $40 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 152.5 million; Market cap: $6.1 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.4%; TSINetwork Rating: Average; www.snclavalin.com) is narrowing its focus to engineering projects in the oil and gas, mining and water treatment industries.
As part of this plan, it recently paid $2.1 billion for U.K.-based Kentz Corp., which supplies engineering and construction services to oil and gas firms. Kentz increased SNC’s exposure to fastgrowing regions like the Middle East, Asia and Australia.
To pay for Kentz, SNC recently sold AltaLink, which distributes electricity in Alberta, for $3.1 billion.
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As part of this plan, it recently paid $2.1 billion for U.K.-based Kentz Corp., which supplies engineering and construction services to oil and gas firms. Kentz increased SNC’s exposure to fastgrowing regions like the Middle East, Asia and Australia.
To pay for Kentz, SNC recently sold AltaLink, which distributes electricity in Alberta, for $3.1 billion.
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