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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TIM HORTONS INC. $60 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 134.2 million; Market cap: $8.1 billion; Price-to-sales ratio: 2.5; Dividend yield: 2.1%; TSINetwork Rating: Average; www.timhortons.com) operates 3,610 coffee-and-donut stores in Canada, 870 in the U.S. and 44 in the Persian Gulf.
In the quarter ended March 30, 2014, the company’s revenue rose 4.8%, to $766.4 million from $731.5 million a year earlier. That’s mainly because it opened 23 outlets in Canada and 11 in the U.S. Same-store sales rose 1.6% at its Canadian locations and 1.9% in the U.S.
Earnings gained 5.5%, to $90.9 million from $86.2 million. Per-share earnings jumped 17.9%, to $0.66 from $0.56, on fewer shares outstanding.
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In the quarter ended March 30, 2014, the company’s revenue rose 4.8%, to $766.4 million from $731.5 million a year earlier. That’s mainly because it opened 23 outlets in Canada and 11 in the U.S. Same-store sales rose 1.6% at its Canadian locations and 1.9% in the U.S.
Earnings gained 5.5%, to $90.9 million from $86.2 million. Per-share earnings jumped 17.9%, to $0.66 from $0.56, on fewer shares outstanding.
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CANADIAN TIRE CORP. $103 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.7 million; Market cap: $8.2 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.canadiantire.ca) operates 492 Canadian Tire stores, which specialize in automotive, household and sporting goods. It also owns other retail chains, such as Mark’s (casual clothing) and SportChek.
The company is selling 20% of its credit card operations to Bank of Nova Scotia (see page 74) for $500 million. Canadian Tire has an option to sell an additional 29% to the bank over the next 10 years.
Meanwhile, Canadian Tire earned $70.6 million in the quarter ended March 29, 2014, down 3.3% from $73.0 million a year earlier. Earnings per share fell 2.2%, to $0.88 from $0.90, on fewer shares outstanding.
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The company is selling 20% of its credit card operations to Bank of Nova Scotia (see page 74) for $500 million. Canadian Tire has an option to sell an additional 29% to the bank over the next 10 years.
Meanwhile, Canadian Tire earned $70.6 million in the quarter ended March 29, 2014, down 3.3% from $73.0 million a year earlier. Earnings per share fell 2.2%, to $0.88 from $0.90, on fewer shares outstanding.
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POTASH CORP. OF SASKATCHEWAN $39 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 837.9 million; Market cap: $32.7 billion; Price-to-sales ratio: 4.6; Dividend yield: 3.9%; TSINetwork Rating: Average; www.potashcorp.com) is up 10% since the start of 2014. That’s mainly because potash miners cut their output in response to the July 2013 breakup of a marketing alliance between producers in Russia and Belarus. These reductions have increased prices from their recent low of $310 U.S. a tonne to $350.
Prices should remain steady, particularly because North American farmers will need more fertilizer to replenish their soil after last year’s record crops. However, the stock trades at a high 22.0 times the $1.65 U.S. a share the company will probably earn in 2014.
Potash Corp. is still a hold.
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Prices should remain steady, particularly because North American farmers will need more fertilizer to replenish their soil after last year’s record crops. However, the stock trades at a high 22.0 times the $1.65 U.S. a share the company will probably earn in 2014.
Potash Corp. is still a hold.
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CGI GROUP INC. $38 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 309.6 million; Market cap: $11.8 billion; Price-to-sales ratio: 1.1; No dividends paid; TSINetwork Rating: Extra Risk; www.cgi.com) has won a contract to help modernize the Michigan state government’s computer systems.
The revenue from this deal—$89.4 million U.S.—is small next to the company’s annual revenue of $10 billion. Still, deals like this enhance CGI’s reputation in the wake of the well-publicized problems it had launching the Obamacare website.
CGI Group is a buy.
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The revenue from this deal—$89.4 million U.S.—is small next to the company’s annual revenue of $10 billion. Still, deals like this enhance CGI’s reputation in the wake of the well-publicized problems it had launching the Obamacare website.
CGI Group is a buy.
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EMERA INC. $34 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 142.6 million; Market cap: $4.8 billion; Price-to-sales ratio: 1.8; Dividend yield: 4.2%; TSINetwork Rating: Average; www.emera.com) has agreed to pay $390 million for 34.9% of a line that will transmit power from a new hydro-electric plant in Labrador to the island of Newfoundland. In addition, Emera will spend $1.6 billion on an undersea line that will transmit 20% of this facility’s power to Nova Scotia.
These projects, which should start up in 2017, will help Emera comply with new Nova Scotia regulations that require it to get 40% of its power from renewable sources by 2030, up from 17% today.
Emera is a buy.
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These projects, which should start up in 2017, will help Emera comply with new Nova Scotia regulations that require it to get 40% of its power from renewable sources by 2030, up from 17% today.
Emera is a buy.
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CANADIAN IMPERIAL BANK OF COMMERCE $98 (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 397.4 million; Market cap: $38.9 billion; Price-to-sales ratio: 2.3; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.cibc.com) is Canada’s fifth-largest bank, with $397.1 billion of assets.
CIBC prefers to focus on domestic banking instead of expanding internationally; Canada accounts for around 85% of its revenue.
The bank recently teamed up with Tim Hortons (see page 76) to launch a new loyalty credit card called the Double Double Visa. This card lets users earn points toward coffee and food at Tim Hortons.
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CIBC prefers to focus on domestic banking instead of expanding internationally; Canada accounts for around 85% of its revenue.
The bank recently teamed up with Tim Hortons (see page 76) to launch a new loyalty credit card called the Double Double Visa. This card lets users earn points toward coffee and food at Tim Hortons.
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BANK OF MONTREAL $81 (Toronto symbol BMO; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 645.2 million; Market cap: $52.3 billion; Price-to-sales ratio: 2.5; Dividend yield: 3.9%; TSINetwork Rating: Above Average; www.bmo.com) is Canada’s fourth-largest bank, with $582.0 billion of assets.
In the quarter ended April 30, 2014, the bank’s earnings rose 12.1%, to $1.1 billion from $966 million a year ago. Per-share earnings rose 13.2%, to $1.63 from $1.44, on fewer shares outstanding.
Earnings from Canadian retail banking (42% of the total) rose 14.2%, as low interest rates spurred demand for mortgages and business loans. The U.S. retail banking division (14%) reported a 5.0% profit decline due to fewer gains on mortgage loan sales.
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In the quarter ended April 30, 2014, the bank’s earnings rose 12.1%, to $1.1 billion from $966 million a year ago. Per-share earnings rose 13.2%, to $1.63 from $1.44, on fewer shares outstanding.
Earnings from Canadian retail banking (42% of the total) rose 14.2%, as low interest rates spurred demand for mortgages and business loans. The U.S. retail banking division (14%) reported a 5.0% profit decline due to fewer gains on mortgage loan sales.
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BANK OF NOVA SCOTIA $73 (Toronto symbol BNS; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.2 billion; Market cap: $87.6 billion; Price-to-sales ratio: 3.0; Dividend yield: 3.5%; TSINetwork Rating: Above Average; www.scotiabank.com) is the third-largest bank in Canada, with $791.8 billion of assets.
The bank continues to expand overseas. It recently agreed to pay $300 million for 51% of the credit card operations of Cencosud S.A., Chile’s largest retailer. The deal will make the bank Chile’s third-largest credit card issuer.
In the quarter ended April 30, 2014, Bank of Nova Scotia’s earnings rose 13.9%, to $1.8 billion, or $1.39 a share. A year earlier, it earned $1.6 billion, or $1.22 a share. Revenue gained 9.8%, to $5.7 billion from $5.2 billion.
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The bank continues to expand overseas. It recently agreed to pay $300 million for 51% of the credit card operations of Cencosud S.A., Chile’s largest retailer. The deal will make the bank Chile’s third-largest credit card issuer.
In the quarter ended April 30, 2014, Bank of Nova Scotia’s earnings rose 13.9%, to $1.8 billion, or $1.39 a share. A year earlier, it earned $1.6 billion, or $1.22 a share. Revenue gained 9.8%, to $5.7 billion from $5.2 billion.
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ROYAL BANK OF CANADA $79 (Toronto symbol RY; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.4 billion; Market cap: $110.6 billion; Price-to-sales ratio: 3.0; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.rbc.com) is Canada’s second-largest bank, with $895.9 billion of assets.
Royal recently completed the sale of its moneylosing Jamaican operations, which included 13 branches. The bank will record a one-time loss of $97 million on the deal, up from its earlier estimate of a $60-million loss.
Meanwhile, Royal earned $2.2 billion in the quarter ended April 30, 2014, up 15.3% from $1.9 billion a year ago. Per-share earnings rose 17.6%, to $1.47 from $1.25, on fewer shares outstanding.
Overall revenue gained 7.2%, to $8.3 billion from $7.7 billion. Revenue at Royal’s retail banking division (which supplied 40% of the total) gained 5.1%, thanks to stronger loan demand in Canada. The lower Canadian dollar also improved the results of its U.S. and Caribbean operations.
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Royal recently completed the sale of its moneylosing Jamaican operations, which included 13 branches. The bank will record a one-time loss of $97 million on the deal, up from its earlier estimate of a $60-million loss.
Meanwhile, Royal earned $2.2 billion in the quarter ended April 30, 2014, up 15.3% from $1.9 billion a year ago. Per-share earnings rose 17.6%, to $1.47 from $1.25, on fewer shares outstanding.
Overall revenue gained 7.2%, to $8.3 billion from $7.7 billion. Revenue at Royal’s retail banking division (which supplied 40% of the total) gained 5.1%, thanks to stronger loan demand in Canada. The lower Canadian dollar also improved the results of its U.S. and Caribbean operations.
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TORONTO-DOMINION BANK $56 (Toronto symbol TD; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.8 billion; Market cap: $99.0 billion; Price-to-sales ratio: 3.0; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.td.com) is Canada’s largest bank, with $896.5 billion of assets.
On January 1, 2014, the bank became the primary credit card issuer for the hugely popular Aeroplan travel reward program run by Aimia Inc. (Toronto symbol AIM). As part of the deal, TD acquired half of the existing Aeroplan accounts from the previous issuer, CIBC (see page 75). It paid $162.5 million upfront and will pay $37.5 million annually over the next three years.
Thanks to this purchase, as well as steady loan demand in Canada and the U.S., TD’s earnings rose 13.5% in the quarter ended April 30, 2014, to $2.1 billion from $1.8 billion a year earlier. Per-share earnings gained 14.7%, to $1.09 from $0.95, on fewer shares outstanding. Revenue rose 12.5%, to $7.4 billion from $6.6 billion.
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On January 1, 2014, the bank became the primary credit card issuer for the hugely popular Aeroplan travel reward program run by Aimia Inc. (Toronto symbol AIM). As part of the deal, TD acquired half of the existing Aeroplan accounts from the previous issuer, CIBC (see page 75). It paid $162.5 million upfront and will pay $37.5 million annually over the next three years.
Thanks to this purchase, as well as steady loan demand in Canada and the U.S., TD’s earnings rose 13.5% in the quarter ended April 30, 2014, to $2.1 billion from $1.8 billion a year earlier. Per-share earnings gained 14.7%, to $1.09 from $0.95, on fewer shares outstanding. Revenue rose 12.5%, to $7.4 billion from $6.6 billion.
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