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
BLACKBERRY LTD. $10 (Toronto symbol BB; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 525.7 million; Market cap: $5.3 billion; Price-to-sales ratio: 1.7; No dividends paid; TSINetwork Rating: Speculative; www.blackberry.com) continues to expand its software business, which provides it with recurring licensing fees and cuts its reliance on selling smartphones. The company recently paid $250 million for AtHoc, whose software lets users securely exchange messages during crises (all amounts except share price and market cap in U.S. dollars.). AtHoc’s clients include the U.S. defence and homeland security departments. BlackBerry also bought Good Technology, whose software improves the security of messages sent through mobile devices, for $425 million....
Enbridge and TransCanada are facing strong opposition to their big pipeline proposals, so they’re focusing on smaller projects instead. This will give both companies more cash for dividends, but we feel TransCanada is the better buy right now. ENBRIDGE INC. $43 (Toronto symbol ENB; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 867.6 million; Market cap: $37.3 billion; Price-to-sales ratio: 1.1; Dividend yield: 4.9%; TSINetwork Rating: Above Average; www.enbridge.com) received regulatory approval for its $7.9-billion Northern Gateway pipeline in June 2014. This project would pump crude from Alberta to Kitimat, B.C. From there, tankers would ship it to customers in Asia. However, Ottawa recently banned oil tankers off the northern B.C. coast. Meanwhile, Enbridge is making progress on its ambitious $38-billion growth plan, which includes expanding its oil and gas pipelines and wind farms. The company will finish building these projects between 2016 and 2019....
ANDREW PELLER LTD. $20 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.3 million; Market cap: $286.0 million; Price-to-sales ratio: 0.9; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.andrewpeller.com) is Canada’s second-largest wine producer, after Constellation Brands. Peller continues to successfully launch premium-priced brands. In the second quarter of its 2016 fiscal year, which ended September 30, 2015, the company’s sales rose 2.9%, to $85.2 million from $82.8 million a year earlier. Earnings jumped 41.7%, to $0.51 a share from $0.36. Without unusual items, such as losses on hedging contracts Peller uses to lock in foreign exchange rates, earnings gained 58.1%. Andrew Peller is a buy....
ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $35 and ACO.Y [class II voting] $35; Income Portfolio, Utilities sector; Shares outstanding: 115.1 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.0; Dividend yield: 3.3%; TSINetwork Rating: Above Average; www.atco.com) has sold its ATCO Emissions Management subsidiary for an undisclosed sum. This business helps producers of oil, gas and electricity reduce air and noise pollution. Small deals like this help simplify ATCO’s complex holding company structure, which should enhance its long-term value. The class I (X) non-voting shares are more liquid than the class II (Y) voting shares....
BANK OF NOVA SCOTIA $53 (Toronto symbol BNS; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.2 billion; Market cap: $63.6 billion; Price-to-sales ratio: 2.9; Dividend yield: 5.3%; TSINetwork Rating: Above Average; www.scotiabank.com) is considering selling all or part of its 49% stake in Thailand’s Thanachart Bank, which has a book value of $2.4 billion. Like many Asian nations, Thailand prohibits foreign firms from controlling domestic banks. Economic weakness and political uncertainty have also hurt loan demand in the country. Bank of Nova Scotia would probably use the proceeds from any sale to expand in Latin America. In 2015, it acquired 51% of Chilean retailer Cencosud’s credit card and consumer loan operations, making Scotiabank that country’s third-largest credit card lender. It also acquired Citibank’s retail banking businesses in Peru, Panama and Costa Rica....
CANADIAN IMPERIAL BANK OF COMMERCE $87 (Toronto symbol CM; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 397.3 million; Market cap: $34.6 billion; Price-to-sales ratio: 2.7; Dividend yield: 5.3%; TSINetwork Rating: Above Average; www.cibc.com) is Canada’s fifth-largest bank, with total assets of $463.3 billion. CIBC has built up its Canadian banking operations in the past few years, and this business now supplies 62% of its earnings. It gets a further 25% from its capital markets division, which provides brokerage and underwriting services in Canada, the U.S. and other countries. The remaining 13% comes from its wealth management division, which has $304.8 billion in assets under administration and management.
Steady revenue and earnings gains
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BOMBARDIER INC. $1.35 (www.bombardier.com) recently sold 30% of its railcar business to Caisse de dépôt et placement du Québec, which manages the province’s public pension plan, for $1.5 billion U.S. It also sold 49.5% of its CSeries passenger jet business for $1 billion U.S. However, its debt of $9.0 billion U.S. is now a high 4.8 times its depressed market cap of $2.7 billion (Canadian). As a result, we’ve cut Bombardier’s TSINetwork Rating, from “Extra Risk” to “Speculative”. Hold. PENGROWTH ENERGY INC. $0.72 (www.pengrowth.com) has sold its Jenner oil property in Alberta for $78 million. This is part of its plan to sell $600 million of its less-important properties, and apply the proceeds to its long-term debt of $1.86 billion (as of November 30, 2015), which is a high 4.8 times its $391.0-million market cap. However, low oil prices will hurt its ability to keep paying down debt, which is why we’ve cut Pengrowth’s TSINetwork Rating, from “Average” to “Speculative”. Hold. RESTAURANT BRANDS INTERNATIONAL INC. $46 (www.rbi.com) has raised its quarterly dividend by 8.3%, to $0.13 U.S. a share from $0.12 U.S. The new annual rate of $0.52 U.S. yields 1.5%. Hold....
In next week’s Successful Investor Hotline, we’ll reveal our top stock picks for 2016. Don’t miss this unique opportunity to profit. TRANSCANADA CORP., $43.47, Toronto symbol TRP, has launched two legal challenges to the U.S. government’s recent decision to block its proposed Keystone XL pipeline, which would have pumped crude oil from Alberta to the U.S. Gulf Coast. The company spent $4.3 billion on Keystone XL and now expects to write off between $2.5 billion and $2.9 billion of this total. To put these figures in context, TransCanada’s market cap (or the value of all outstanding shares) is $30.8 billion....
PLEASE NOTE: This is our last Hotline for 2015. Our next Hotline will go out on Friday, January 8, 2016. ENCANA CORP., $7.02, Toronto symbol ECA, fell 15% this week after cutting its dividend and 2016 capital spending plans. In response to the weak outlook for oil and natural gas, Encana has cut its quarterly payout by 78.6%, to $0.015 a share from $0.07 (all amounts except share price in U.S. dollars). The new annual rate of $0.06 yields 1.2%. Encana will also eliminate the 2% discount it offers to shareholders who reinvest their dividends in additional shares. In all, these moves will save it $185 million a year....
CANADIAN PACIFIC RAILWAY LTD., $169.77, Toronto symbol CP, has revised its takeover offer for U.S.-based railway Norfolk Southern Corp. (New York symbol NSC). The combined firm would be North America’s largest railway, with more than 56,000 kilometres of track. Buying Norfolk would also give CP greater access to ports on the U.S. Gulf Coast and Atlantic Ocean. Under the new deal, Norfolk shareholders would receive more stock and less cash: $32.86 U.S. a share in cash plus 0.451 of a CP share for each Norfolk share held. That would give them 47% of the combined company, compared to 41% under the original offer....