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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Dividend Stocks Library Archive
RIOCAN REAL ESTATE INVESTMENT TRUST $28 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 324.8 million; Market cap: $9.1 billion; Price-to-sales ratio: 8.1; Dividend yield: 5.0%; TSINetwork Rating: Average; www.riocan.com) owns all or part of 303 shopping centres in Canada, including 16 under development. The trust cuts its risk to online shopping and declining mall traffic in several ways. For example, It focuses on Canada’s six largest cities—Toronto, Montreal, Ottawa, Edmonton, Calgary and Vancouver. They account for 75.0% of its rental revenue. High-quality tenants draw shoppers ...
GREAT-WEST LIFECO INC. $34 (www.greatwestlifeco.com) sells health and life insurance in Canada, the U.S. and Europe. It also offers mutual funds, retirement planning and wealth management. The company paid out higher life and health insurance claims in the three months ended March 31, 2016....
SUNCOR ENERGY INC., $33.84, Toronto symbol SU, has had to reduce production at its main oil sands operations about 25 kilometres north of Fort McMurray, Alberta, due to severe wildfires. In the quarter ended March 31, 2016, these operations accounted for 95% of Suncor’s bitumen production. The fires have also slowed production at the Syncrude oil sands facility, about 35 kilometers north of Fort McMurray. Suncor recently purchased an additional 5.0% interest in the operation. It now owns 53.74% of project. Its latest share purchase was for $937 million. That’s equal to 1.4 times the company’s first quarter cash flow of $682 million, or $0.45 a share....
CGI GROUP INC., $57.32, Toronto symbol GIB.A, is Canada’s largest provider of computer-outsourcing services. It helps its clients automate certain routine functions such as accounting and buying supplies. That makes companies more efficient and lets them focus on their main businesses. In its 2016 second quarter, which ended March 31, 2016, CGI earned $268.3 million. That’s a 6.8% increase from the $251.2 million it earned a year earlier. Per-share profits gained 10.3%, to $0.86 from $0.78, on fewer shares outstanding. That missed the consensus estimate of $0.88. In the latest quarter, higher revenue in France, the U.K. and parts of Asia offset declining contributions from CGI’s U.S. defense clients. Revenue improved 5.7%, to $2.75 billion from $2.60 billion. The consensus forecast had been $2.74 billion. The weaker Canadian dollar also helped to lift revenue, contributing an extra $173.7 million....
CANADIAN PACIFIC RAILWAY LTD., $189.30, Toronto symbol CP, ships freight over a 22,000-kilometre rail network between Montreal and Vancouver, with links to hubs in the U.S. Midwest and Northeast. The company reported 4.4% lower freight volumes in the latest quarter. That’s mainly due to weaker prices for oil, minerals and other commodities. They forced many producers in Canada and the U.S. to reduce their production and so their shipping. As more U.S. power utilities switch to natural gas, coal shipments have also suffered. In the three months ended March 31, 2016, CP’s revenue fell 4.4%, to $1.59 billion from $1.67 billion a year earlier. That missed the consensus forecast of $1.61 billion....
BOMBARDIER INC., Toronto symbols BBD.A $1.84 and BBD.B $1.62, announced this week that Latvia-based Air Baltic has exercised its option to buy seven more of the company’s new CSeries passenger jets. The client had previously ordered 13 planes. Bombardier will begin to deliver the aircraft by the end of 2016. The company now has firm orders for 250 CSeries planes. Based on the list price for the aircraft, these orders are worth $18 billion (all amounts except share prices in U.S. dollars). To put that in context, Bombardier’s total revenue was $18.2 billion in 2015. However, the company typically offers discounts to customers that buy multiple planes. So the total value of its CSeries backlog is probably much less than the list price. OUR RECOMMENDATION: Bombardier is still a hold....
TransCanada recently had to write off its investment in its Keystone XL oil pipeline project after the U.S. government rejected the plan. Political pressure in Canada could also force it to cancel its huge Energy East pipeline. Despite these setbacks, TransCanada’s future looks bright. The company recently announced a big acquisition in the U.S. that should fuel its growth for years to come. As well, it will soon complete $13 billion of smaller pipelines and power plants. The projects already have long-term commitments from future customers. Those contracts cut the risk of these new ventures. TRANSCANADA CORP. $50 (Toronto symbol TRP; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 702.3 million; Market cap: $35.1 billion; Priceto- sales ratio: 3.1; Dividend yield: 4.5%; TSINetwork Rating: Above Average; www.transcanada.com) operates a 67,300- kilometre pipeline network that pumps natural gas from Alberta to Eastern Canada and the U.S. This system supplies 20% of North America’s natural gas needs. In 2015, gas pipelines provided 47% of TransCanada’s revenue and 54% of its earnings....
CANADIAN PACIFIC RAILWAY LTD. $192 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 153.0 million; Market cap: $29.4 billion; Price-to-sales ratio: 4.2; Dividend yield: 0.7%; TSINetwork Rating: Above Average; www.cpr.ca) has abandoned its plan to merge with U.S.-based railway Norfolk Southern Corp. (New York symbol NSC). The combination would have created North America’s largest railway. Norfolk rejected CP’s latest offer of about $30 billion U.S. in cash and shares. In addition, U.S. transportation regulators probably would have blocked any deal no matter how CP structured the transaction. CP’s shares gained 5% on the news. That’s because big acquisitions like this usually come with substantial risk. In addition, investors feel that CP will now use some of the cash it had for the takeover to buy back shares....
In addition to TransCanada (see page 41), we like the outlook of these four utilities. Like TransCanada, Emera and Fortis are expanding in the U.S. These purchases cut their reliance on Canada, and should enhance their earnings and dividends for years to come. Canadian Utilities and ATCO have both suffered lately due to their high exposure to Alberta, where low oil prices have hurt the economy and power prices. However, their new projects should let them continue to raise their dividends....
IMPERIAL OIL LTD. $40 (Toronto symbol IMO; Conservative Growth and Income Portfolios, Shares outstanding: 847.6 million; Market cap: $33.9 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.4%; TSINetwork Rating: Average; www.imperialoil.ca) plans to expand its oil sands operations in the Cold Lake area of northern Alberta. In 2015, Cold Lake supplied 158,000 barrels a day, or 43% of Imperial’s average daily production of 366,000 barrels a day. This expansion will cost $2 billion. It should produce an additional 50,000 barrels a day by 2022. Imperial’s expertise with solvent assisted, steam-assisted gravity drainage technology should help cut its operating costs. That process also creates fewer greenhouse gasses than conventional extraction methods. Imperial Oil is a buy.