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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p>SHAWCOR LTD. $55 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 60.1 million; Market cap: $3.3 billion; Price-to-sales ratio: 1.8; Dividend yield: 1.1%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings that keep oil and natural gas pipelines from rusting. The company also makes industrial products, such as electrical wire and protective sheaths. Thanks to acquisitions and new pipeline-coating contracts in North America and Europe, ShawCor’s revenue rose 5.4% in the three months ended March 31, 2014, to $479.1 million from $454.7 million a year earlier.
However, the company’s earnings declined 12.3%, to $61.9 million from $70.6 million, due to lower profits from joint ventures and higher interest costs and taxes. Per-share earnings rose 2.0%, to $1.03 from $1.01, on fewer shares outstanding.
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However, the company’s earnings declined 12.3%, to $61.9 million from $70.6 million, due to lower profits from joint ventures and higher interest costs and taxes. Per-share earnings rose 2.0%, to $1.03 from $1.01, on fewer shares outstanding.
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PRECISION DRILLING CORP. $14 (Toronto symbol PD; Aggressive Growth Portfolio, Resource sector; Shares outstanding: 292.1 million; Market cap: $4.1 billion; Price-to-sales ratio: 2.0; Dividend yield: 1.7%; TSINetwork Rating: Extra Risk; www.precisiondrilling.com) provides contract drilling services to land-based oil and gas producers, mainly in North America. The company operates 330 rigs.
Higher oil and gas prices have spurred demand for Precision’s drilling services. As a result, its revenue rose 12.8% in the first quarter of 2014, to $672.2 million from $595.7 million a year earlier. Earnings gained 8.8%, to $101.6 million from $93.3 million. Per-share earnings rose 6.1%, to $0.35 from $0.33, on more shares outstanding.
In response to stronger-than-expected drilling activity, Precision now plans to spend $833 million to build and upgrade rigs in 2014, up 31.4% from its earlier forecast of $634 million. Drillers have already signed contracts for these new rigs, which cuts the risk of this investment.
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Higher oil and gas prices have spurred demand for Precision’s drilling services. As a result, its revenue rose 12.8% in the first quarter of 2014, to $672.2 million from $595.7 million a year earlier. Earnings gained 8.8%, to $101.6 million from $93.3 million. Per-share earnings rose 6.1%, to $0.35 from $0.33, on more shares outstanding.
In response to stronger-than-expected drilling activity, Precision now plans to spend $833 million to build and upgrade rigs in 2014, up 31.4% from its earlier forecast of $634 million. Drillers have already signed contracts for these new rigs, which cuts the risk of this investment.
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SNC-LAVALIN GROUP INC. $52 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 152.1 million; Market cap: $7.9 billion; Price-to-sales ratio: 1.0; Dividend yield: 1,8%; TSINetwork Rating: Average; www.snclavalin.com) has agreed to sell AltaLink to Berkshire Hathaway (New York symbol BRK.B), the holding company controlled by billionaire investor Warren Buffett.
Wholly owned AltaLink provides electricity to 85% of Alberta’s population through 12,000 kilometres of power lines and 280 substations.
The company will receive $3.2 billion (or $2.9 billion after taxes). The transaction should close by the end of this year.
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Wholly owned AltaLink provides electricity to 85% of Alberta’s population through 12,000 kilometres of power lines and 280 substations.
The company will receive $3.2 billion (or $2.9 billion after taxes). The transaction should close by the end of this year.
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p>SUNCOR ENERGY INC. $43 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.5 billion; Market cap: $64.5 billion; Price-to-sales ratio: 1.5; Dividend yield: 2.1%; TSINetwork Rating: Average; www.suncor.com) is Canada’s largest integrated oil company by market cap (or the value of all its outstanding shares). Suncor gets 40% of its revenue and 65% of its earnings from producing crude oil and natural gas. Its 7.7 billion barrels of proven and probable reserves should last 35 years, based on current production rates.
The oil sands account for 70% of the company’s output. It also operates offshore platforms in Atlantic Canada and the North Sea, as well as conventional wells in Libya. However, political unrest has shut down some of Libya’s ports, limiting Suncor’s crude exports from the country.
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The oil sands account for 70% of the company’s output. It also operates offshore platforms in Atlantic Canada and the North Sea, as well as conventional wells in Libya. However, political unrest has shut down some of Libya’s ports, limiting Suncor’s crude exports from the country.
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We’ve had great success with companies spun off from larger parent firms in the past few years. That’s mainly because spinoffs let both companies focus on their already well-established businesses. As well, a parent will only hand out a subsidiary’s shares to its own investors if it’s confident the spinoff will benefit both companies. Last week, we covered a spinoff that has been successful so far, Mondelez (see the article here). This week we examine the company that spun it off, Kraft Foods. We cover both of these stocks in our advisory on U.S. investing, Wall Street Stock Forecaster....
We’ve had great success with companies spun off from larger parent firms in the past few years. That’s mainly because spinoffs let both companies focus on their already well-established businesses. As well, a parent will only hand out a subsidiary’s shares to its own investors if it’s confident the spinoff will benefit both companies. Shares of this food producer we cover in Wall Street Stock Forecaster have jumped since it was spun off to become a separate firm. Here is our analysis of its future prospects....
POTASH CORP. OF SASKATCHEWAN $37 (www.potashcorp .com) exports potash fertilizer to customers outside North America through Canpotex, a marketing joint venture. Potash Corp., Agrium (see below) and Mosaic Co. (New York symbol MOS) each own a third of Canpotex....
CENOVUS ENERGY INC. $32 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 756.5 million; Market cap: $24.5 billion; Price-to-sales ratio: 1.3; Dividend yield: 3.3%; TSINetwork Rating: Average; www.cenovus.com) gets about 40% of its output from its oil sands projects in Alberta. Conventional oil and natural gas wells supply the other 60%.
U.S.-based ConocoPhillips (New York symbol COP) owns 50% of Cenovus’s main Foster Creek and Christina Lake oil sands projects in Alberta. These properties produce heavy bitumen, which Cenovus ships to its 50%-owned refineries in Illinois and Texas. Phillips 66 (New York symbol PSX) owns the other 50% of these refineries. In 2013, refining accounted for 66% of Cenovus’s revenue and 40% of its earnings.
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U.S.-based ConocoPhillips (New York symbol COP) owns 50% of Cenovus’s main Foster Creek and Christina Lake oil sands projects in Alberta. These properties produce heavy bitumen, which Cenovus ships to its 50%-owned refineries in Illinois and Texas. Phillips 66 (New York symbol PSX) owns the other 50% of these refineries. In 2013, refining accounted for 66% of Cenovus’s revenue and 40% of its earnings.
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DUNDEE CORP. $17 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 54.1 million; Market cap: $919.7 million; Price-to-sales ratio: 2.4; No dividends paid; TSINetwork Rating: Average; www.dundeecorp.com) owns businesses in the wealth management, real estate, natural resource and agriculture industries.
The company lost $92.6 million, or $1.88 a share, in 2013. That’s a big drop from the $25.2 million, or $0.29 a share, it earned in 2012. Revenue fell 6.3%, to $200.7 million from $214.2 million.
The declines are mainly because weak commodity prices hurt the contribution of Dundee’s resource holdings. As well, fewer firms issued shares in 2013, which hurt profits at its Dundee Securities brokerage firm. The company is also spending more to expand its agriculture businesses, which further depressed results.
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The company lost $92.6 million, or $1.88 a share, in 2013. That’s a big drop from the $25.2 million, or $0.29 a share, it earned in 2012. Revenue fell 6.3%, to $200.7 million from $214.2 million.
The declines are mainly because weak commodity prices hurt the contribution of Dundee’s resource holdings. As well, fewer firms issued shares in 2013, which hurt profits at its Dundee Securities brokerage firm. The company is also spending more to expand its agriculture businesses, which further depressed results.
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TRANSCANADA CORP. $51 (Toronto symbol TRP; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 707.6 million; Market cap: $36.1 billion; Price-to-sales ratio: 3.8; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.transcanada.com) has received new long-term commitments from U.S. natural gas producers for its ANR pipeline system. Trans- Canada has now sold all of this line’s capacity.
This strong demand should prompt Trans- Canada to expand the ANR line over the next few years. That would let it handle rising production at the Utica and Marcellus shale gas fields in New York State and Pennsylvania.
TransCanada is a buy....
This strong demand should prompt Trans- Canada to expand the ANR line over the next few years. That would let it handle rising production at the Utica and Marcellus shale gas fields in New York State and Pennsylvania.
TransCanada is a buy....