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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Wells Fargo and J.P. Morgan passed the Federal Reserve’s latest “stress test,” which measures how well financial firms would cope with a sharp jump in unemployment, falling stock prices and other unfavourable conditions. Here is our analysis of the two banks, both of which we cover regularly in our advisory on U.S. stocks, Wall Street Stock Forecaster....
Ottawa continues to impose new rules on Canada’s main wireless firms in an effort to encourage more competition. These measures include restricting the new radio frequencies (or spectrum) they can buy, cutting wireless contract terms from three years to two and capping roaming charges. Meanwhile, new rules will force TV providers to let subscribers buy the channels they want, instead of having to purchase a package....
TORSTAR CORP. $7.74 (www.torstar.com) is selling its Harlequin book-publishing subsidiary to News Corp. (Nasdaq symbol NWSA), the parent company of publishing firm HarperCollins. The company will receive $455 million, which is equal to 73% of its $623.4-million market cap. Torstar will put the proceeds toward its bank loans and other debt, which stood at $192.9 million on March 31, 2014.
Meanwhile, Torstar’s earnings in the first quarter of 2014 (including Harlequin) rose 70.2%, to $7.1 million, or $0.09 a share. It earned $4.2 million, or $0.05 a share a year earlier. The gain is entirely due to savings from an ongoing restructuring plan, mainly job cuts. Weak advertising sales at its newspapers reduced its overall revenue by 6.7%, to $292.4 million from $313.4 million.
Selling Harlequin means Torstar will focus entirely on its cyclical newspaper and Internet businesses. That adds risk. However, the cash from the sale will help it sustain its current dividend. Best Buy.
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Meanwhile, Torstar’s earnings in the first quarter of 2014 (including Harlequin) rose 70.2%, to $7.1 million, or $0.09 a share. It earned $4.2 million, or $0.05 a share a year earlier. The gain is entirely due to savings from an ongoing restructuring plan, mainly job cuts. Weak advertising sales at its newspapers reduced its overall revenue by 6.7%, to $292.4 million from $313.4 million.
Selling Harlequin means Torstar will focus entirely on its cyclical newspaper and Internet businesses. That adds risk. However, the cash from the sale will help it sustain its current dividend. Best Buy.
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CANADIAN NATIONAL RAILWAY CO. $64 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 824.5 million; Market cap: $52.8 billion; Price-to-sales ratio: 5.0; Dividend yield: 1.6%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway. Its 32,350-kilometre network stretches across the country and through the U.S. Midwest to the Gulf of Mexico.
Thanks to strong shipping volumes in the wake of the recession, CN’s revenue rose 43.5%, from $7.4 billion in 2009 to $10.6 billion in 2013.
Earnings jumped 68.4%, from $1.5 billion to $2.6 billion; while per-share earnings rose 88.9%, from $1.62 to $3.06, on fewer shares outstanding (all per-share amounts adjusted for a 2-for-1 stock split in November 2013).
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Thanks to strong shipping volumes in the wake of the recession, CN’s revenue rose 43.5%, from $7.4 billion in 2009 to $10.6 billion in 2013.
Earnings jumped 68.4%, from $1.5 billion to $2.6 billion; while per-share earnings rose 88.9%, from $1.62 to $3.06, on fewer shares outstanding (all per-share amounts adjusted for a 2-for-1 stock split in November 2013).
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ENCANA CORP. $26 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 740.9 million; Market cap: $19.3 billion; Price-to-sales ratio: 3.2; Dividend yield: 1.2%; TSINetwork Rating: Average; www.encana.com) has agreed to buy shale oil properties in the Eagle Ford area of southern Texas for $3.1 billion (all amounts except share price and market cap in U.S. dollars). A separate deal to sell natural gas fields in eastern Texas for $530 million will help pay for this purchase.
Including Eagle Ford, Encana now has six core properties. The other five are: Montney (B.C.), Duvernay (Alberta), DJ Basin (Colorado), San Juan Basin (New Mexico) and the Tuscaloosa Marine Shale (Louisiana). All of these areas contain large amounts of oil and natural gas liquids, such as butane and propane. That cuts Encana’s exposure to weak gas prices.
The stock is up 35% since Encana said it would expand its oil production in November 2013. Even so, it trades at a moderate 7.2 times the company’s projected 2014 cash flow of $3.31 a share.
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Including Eagle Ford, Encana now has six core properties. The other five are: Montney (B.C.), Duvernay (Alberta), DJ Basin (Colorado), San Juan Basin (New Mexico) and the Tuscaloosa Marine Shale (Louisiana). All of these areas contain large amounts of oil and natural gas liquids, such as butane and propane. That cuts Encana’s exposure to weak gas prices.
The stock is up 35% since Encana said it would expand its oil production in November 2013. Even so, it trades at a moderate 7.2 times the company’s projected 2014 cash flow of $3.31 a share.
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IGM FINANCIAL INC. $54 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 252.4 million; Market cap: $13.6 billion; Price-to-sales ratio: 5.1; Dividend yield: 4.0%; TSINetwork Rating: Above Average; www.igmfinancial.com) continues to benefit as rising stock markets spur the value of its clients’ holdings.
As of April 30, 2014, IGM had $138.25 billion worth of assets under management, up 10.0% from $125.7 billion a year earlier. The company’s fee income rises and falls with the value of the securities it manages, so its revenue and earnings gain when the price of these assets rises.
IGM Financial is a buy.
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As of April 30, 2014, IGM had $138.25 billion worth of assets under management, up 10.0% from $125.7 billion a year earlier. The company’s fee income rises and falls with the value of the securities it manages, so its revenue and earnings gain when the price of these assets rises.
IGM Financial is a buy.
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METRO INC. $68 (Toronto symbol MRU; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 87.6 million; Market cap: $6.0 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.8%; TSINetwork Rating: Average; www.metro.ca) operates about 600 supermarkets in Quebec and Ontario. It also has over 250 drugstores that operate under the Brunet, The Pharmacy and Drug Basics banners.
Metro continues to cut costs in response to competition from larger Canadian chains, like Loblaw and Sobeys, and big box stores like Wal-Mart and Costco. It is also converting some of its underperforming Metro outlets in Ontario to the faster-growing Food Basics discount banner.
In its fiscal 2014 second quarter, which ended March 15, 2014, Metro’s earnings rose 0.5%, to $96.9 million from $96.4 million a year earlier. In the last six months, the company has spent $301.8 million on share buybacks. Due to fewer shares outstanding, per-share earnings rose 9.2%, to $1.07 from $0.98.
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Metro continues to cut costs in response to competition from larger Canadian chains, like Loblaw and Sobeys, and big box stores like Wal-Mart and Costco. It is also converting some of its underperforming Metro outlets in Ontario to the faster-growing Food Basics discount banner.
In its fiscal 2014 second quarter, which ended March 15, 2014, Metro’s earnings rose 0.5%, to $96.9 million from $96.4 million a year earlier. In the last six months, the company has spent $301.8 million on share buybacks. Due to fewer shares outstanding, per-share earnings rose 9.2%, to $1.07 from $0.98.
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THOMSON REUTERS CORP. $39 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 811.1 million; Market cap: $31.6 billion; Price-to-sales ratio: 2.4; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.thomsonreuters.com) earned $374 million in the first quarter of 2014, up 19.5% from $313 million a year earlier (all amounts except share price and market cap in U.S. dollars). Due to fewer shares outstanding, per-share earnings rose 21.1%, to $0.46 from $0.38. Revenue rose 1.0%, to $3.13 billion from $3.10 billion.
The higher earnings are mainly due to savings from a recent restructuring plan, including job cuts and eliminating less-profitable products. These savings will help Thomson offset weaker demand for its information products from financial institutions, particularly in Europe, as they continue to cut costs in the wake of the 2008 credit crisis. Meanwhile, demand for Thomson’s other data products (legal, tax and accounting, and intellectual property/science) remains strong.
Thomson Reuters is a buy.
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The higher earnings are mainly due to savings from a recent restructuring plan, including job cuts and eliminating less-profitable products. These savings will help Thomson offset weaker demand for its information products from financial institutions, particularly in Europe, as they continue to cut costs in the wake of the 2008 credit crisis. Meanwhile, demand for Thomson’s other data products (legal, tax and accounting, and intellectual property/science) remains strong.
Thomson Reuters is a buy.
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BELL ALIANT INC. $28 (Toronto symbol BA, Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 229.1 million; Market cap: $6.4 billion; Price-to-sales ratio: 2.3; Dividend yield: 6.8%; TSINetwork Rating: Average; www.bellaliant.ca) sells phone and Internet services to 2.4 million customers in Atlantic Canada and rural Ontario and Quebec.
The company continues to invest heavily in fibre optic networks. It now has 963,048 high-speed Internet users (up 3.9% from a year earlier) and 189,781 digital TV customers (up 38.3%).
However, lower demand for regular phone services caused its revenue to fall 1.2% to $675.7 million in the three months ended March 31, 2014, from $683.6 million a year earlier. Before one-time items, earnings declined 9.1%, to $0.40 a share from $0.44.
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The company continues to invest heavily in fibre optic networks. It now has 963,048 high-speed Internet users (up 3.9% from a year earlier) and 189,781 digital TV customers (up 38.3%).
However, lower demand for regular phone services caused its revenue to fall 1.2% to $675.7 million in the three months ended March 31, 2014, from $683.6 million a year earlier. Before one-time items, earnings declined 9.1%, to $0.40 a share from $0.44.
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MANITOBA TELECOM SERVICES INC. $31 (Toronto symbol MBT; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 77.1 million; Market cap: $2.4 billion; Price-to-sales ratio: 1.6; Dividend yield: 5.5%; TSINetwork Rating: Average; www.mts.ca) gets around 55% of its revenue from its 1.3 million telephone and wireless customers in Manitoba.
The remaining 45% comes from Allstream, which sells integrated telephone, Internet and other communication services to businesses across Canada.
The company has suffered a couple of setbacks in the past few months. The first came late last year, when Ottawa blocked its plan to sell Allstream for $405 million to a private firm controlled by an Egyptian billionaire.
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The remaining 45% comes from Allstream, which sells integrated telephone, Internet and other communication services to businesses across Canada.
The company has suffered a couple of setbacks in the past few months. The first came late last year, when Ottawa blocked its plan to sell Allstream for $405 million to a private firm controlled by an Egyptian billionaire.
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