dividends paid

ALARMFORCE INDUSTRIES $6.66 (Toronto symbol AF: SI Rating: Speculative) (1-800-267-2001; www.alarmforce.com; Shares outstanding: 12.2 million; Market cap: $81.3 million; No dividends paid) continues to hit all-time highs as it adds subscribers. The company reports that it had 102,000 subscribers as of October 31, 2009. That’s up 12% from a year earlier. AlarmForce mainly attracts new customers by aggressively promoting itself through radio and television advertising. Demand for security systems remains steady, and AlarmForce’s balance sheet is strong. These factors will let the company continue to profit from the economic recovery. AlarmForce is a buy....

AMAZON.COM $128.36 (Nasdaq symbol AMZN; SI Rating: Extra Risk) (206-266-1000; www.amazon.com; Shares outstanding: 433.0 million; Market cap: $55.6 billion; No dividends paid) is now selling its Kindle e-book reader in Canada. The reader costs $279 U.S., plus shipping. Canadian Kindle users can wirelessly download files from Amazon’s Kindle store, which contains over 300,000 books. Most bestsellers and new releases will be $11.99 U.S. or less. Users can download Canadian newspapers, including the Globe and Mail and the National Post, as well as leading U.S. and international magazines and newspapers. For now, Canadians won’t be able to use all of the Kindle’s wireless-connection features, including subscriptions to blogs and the Kindle web browser. This is likely because Amazon has not reached a deal with a Canadian wireless carrier, such as BCE, Rogers or Telus....

Investors are paying more attention to dividend yields (a company’s total annual dividends paid per share divided by the current stock price) as volatile stock markets continue to recover. Companies are responding by doing their best to maintain, or even increase, their dividend payments. That’s good news for investors, because dividends are more dependable than capital gains as a source of income. In fact, dividends typically contribute up to a third of an investor’s long-term return. Tax cuts in recent years also mean that you pay roughly the same tax on dividend income and capital gains. ...

MDS INC. $7.83 (Toronto symbol MDS; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 120.1 million; Market cap: $940.4 million; Price-to-sales ratio: 0.7; No dividends paid since October 2006; SI Rating: Extra Risk) has three businesses: MDS Analytical Technologies sells mass spectrometers that detect and measure substances in blood and other patient samples; MDS Pharma Services conducts contract-drug research for pharmaceutical companies; and MDS Nordion supplies medical isotopes for cancer research. The company recently agreed to sell its Analytical Technologies business for $650 million (all amounts except share price and market cap in U.S. dollars). U.S. anti-trust regulators are still examining the deal, but it should close in early 2010. MDS will use $400 million to $450 million of these funds to buy back shares. It will probably put the remaining proceeds toward its $245-million long-term debt, which is about a quarter of its market cap. MDS also holds cash of $298 million, or $2.48 a share....

LINAMAR CORP. $14 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.7 million; Market cap: $905.8 million; Price-to-sales ratio: 0.5; Dividend yield: 0.9%; SI Rating: Extra Risk) will close its plant in eastern Ontario in the next few months. The company feels the plant, which makes parts for brakes, suspensions and other auto systems, is no longer profitable. It is also Linamar’s only facility outside of its main operations in southwestern Ontario. The company did not say how much it would have to pay in severance. Meanwhile, Linamar earned $0.02 a share in the three months ended September 30, 2009. That’s down 90.9% from $0.22 a year earlier. However, it’s a big improvement over the $0.16 a share it lost in the second quarter of 2009. These figures exclude writedowns and severance payments related to previous plant closures. Sales fell 22.1%, to $421.1 million from $540.4 million. However, the company has won $300 million in new contracts this year, partly because some of its competitors went bankrupt during the recession. Linamar is a buy....

Copernican International Financial Split Corp., $0.60, symbol CIR on Toronto (Shares outstanding: 5.7 million; Market cap: $3.4 million), is a split-share company that holds shares of leading retail bank, life-insurance and investment-management companies based outside of North America. Copernican International Financial Split Corp. first sold shares to the public at $10 each, and began trading on Toronto in March 2007. A split-share company issues two classes of shares. The capital shares get all, or most of, the capital gains and losses and dividend income over and above the quarterly dividends paid to holders of the preferred shares....

FORT CHICAGO ENERGY PARTNERS L.P. $8.47 (Toronto symbol FCE.UN; Units outstanding: 136.3 million; Market cap: $1.1 billion; SI Rating: Extra Risk) owns and operates energy infrastructure across North America. One of its major holdings is a 50% interest in the Alliance natural-gas pipeline, which runs 3,000 kilometres from Fort St. John, B.C., to Chicago. Enbridge Inc. owns the other 50%. Fort Chicago and Enbridge also own 85.4% of the Aux Sable natural gas liquids plant. As well, Fort Chicago owns 100% of the 1,324-kilometre Alberta Ethane Gathering System. Fort Chicago has added to its power-plant holdings over the last couple of years. It now owns natural gas-fired cogeneration plants in Ontario, California and Colorado, plus power plants in Ontario and Prince Edward Island....

EPCOR POWER, L.P. $15.04 (Toronto symbol EP.UN; Shares outstanding: 53.9 million; Market cap: $810.7 million; SI Rating: Extra Risk) has interests in 25 power plants in Canada and the U.S. These generate a total of 1,400 megawatts. In the three months ended June 30, 2009, EPCOR’s revenue rose 14.8%, to $165.2 million from $143.9 million. Cash flow per unit rose 29.1%, to $0.71 from $0.55. The trust’s plants generated and sold more power, including output from the Morris cogeneration facility in Illinois, which EPCOR bought late last year for $72.2 million U.S. Despite the improved results, EPCOR was still paying out almost all of its cash flow to unitholders, so it cut its quarterly distribution by 30.2%, to $0.44 a unit from $0.63, with the June 2009 payment. At this rate, it will pay out roughly 75% of its cash flow. EPCOR believes it can sustain this rate regardless of whether it remains a trust or converts to a corporation in 2011, when Ottawa’s new income-trust tax takes effect. EPCOR now yields 11.2%....

Long-time Successful Investor readers may recall that a decade or two ago, we regularly reminded them that dividends could contribute up to a third of their long-term investment returns, without even considering the tax-cutting effects of the dividend tax credit (see below). Earlier in this decade, yields of dividend paying stocks were generally too low to provide a third of investment returns. But now that yields of dividend paying stocks have moved back up to their current level, it’s realistic to assume they will once again contribute as much as a third of your total return. That’s a good thing for investors, since dividends are more dependable than capital gains as a source of investment income. ...

EPCOR POWER, L.P. $13.80 (Toronto symbol EP.UN; Shares outstanding: 53.9 million; Market cap: $743.8 million; SI Rating: Extra Risk) has interests in 26 power plants in Canada and the U.S. In total, the plants generate 1,502 megawatts. In the three months ended December 31, 2008, EPCOR’s revenue fell 9%, to $103.8 million from $114.1 million. The decline came mostly from currency-related factors. Cash flow per unit fell 6.3%, to $0.59 from $0.63, mainly because of higher operating costs at some plants. EPCOR pays a quarterly distribution of $0.63 per unit, for a yield of 18.3%. The company paid out 107% of its cash flow in the latest quarter. The high level came largely from unusually high maintenance costs. That spending has now slowed, but the payout ratio could still be as high as 102% this year. That makes a distribution cut a possibility. However, the trust has room to cut while maintaining a high yield....