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
ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $40 and ACO.Y [class II voting] $40; Income Portfolio, Utilities sector; Shares outstanding: 115.1 million; Market cap: $4.6 billion; Price-to-sales ratio: 1.1; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.atco.com) holds 53.2% of Canadian Utilities and 75.5% of ATCO Structures & Logistics, which makes temporary buildings for construction, mining and energy-exploration firms. Canadian Utilities owns the other 24.5%. In the three months ended June 30, 2015, ATCO earned $8 million, or $0.06 a share, down 87.9% from $66 million, or $0.57. Revenue declined 15.0%, to $947 million from $1.1 billion. Excluding unusual items, earnings were flat at $57 million. Based on current prices, you can buy an ATCO share for $40 and get roughly $45 worth of Canadian Utilities. You might say this means you get the structures business, which provides around 20% of ATCO’s earnings, for free....
FORTIS INC. $38 (Toronto symbol FTS; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 279.9 million; Market cap: $10.6 billion; Price-to-sales ratio: 1.7; Dividend yield 3.9%; TSINetwork Rating: Above Average; www.fortisinc.com) owns electrical utilities across Canada and in the U.S. and Caribbean. It also distributes natural gas in British Columbia. The company recently raised its quarterly dividend by 10.3%, to $0.375 a share from $0.34. The new annual rate of $1.50 yields 3.9%. Fortis has raised its payout every year for the past 43 years. The company also plans to increase the payout by around 6% each year through 2020. Fortis is a buy....
BOMBARDIER INC. (Toronto symbols BBD.A $1.75 and BBD.B $1.70; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $2.9 billion; Price-to-sales ratio: 0.2; Dividend suspended in February 2015; TSINetwork Rating: Extra Risk; www.bombardier.com) recently ended talks with European aircraft maker Airbus that would have given that company a controlling stake in Bombardier’s new CSeries passenger jet. In exchange, Airbus would have helped Bombardier pay for the new plane’s development costs. The company still plans to begin delivering the CSeries in 2016: it has firm orders for 243 planes worth roughly $16 billion U.S. However, ongoing delays have halted new orders. Bombardier is still a hold.
AGRIUM INC. $126 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 142.8 million; Market cap: $18.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 3.6%; TSINetwork Rating: Average; www.agrium.com) has shifted its focus in the past few years from making fertilizers to selling them, along with seeds and other products, to farmers. That has cut its exposure to volatile bulk-fertilizer prices. Agrium now gets 75% of its sales and 60% of its earnings from its retail stores, which consist of 1,500 locations in North America, South America and Australia. The remaining 25% of sales and 40% of earnings comes from making nitrogen-based fertilizers from natural gas. Agrium also operates potash and phosphate fertilizer mines....
POTASH CORP. OF SASKATCHEWAN $29 (www.potash corp.com) has dropped its $8.8-billion U.S. offer to buy German fertilizer producer K+S AG. That price is equal to 48% of Potash Corp.’s $23.8 billion (Canadian) market cap. K+S refused to negotiate a friendly deal, and a hostile offer would have faced strong opposition from German regulators on concerns that the company would close some of K+S’s mines. Hold. RESTAURANT BRANDS INTERNATIONAL INC. $47 (www.rbi.com) plans to open over 150 Tim Hortons coffee-anddonut stores in Cincinnati, Ohio, over the next 10 years. The company currently has 4,776 Tim Hortons outlets in Canada, the U.S. and the Middle East. A franchisee will build and operate these stores, which cut Restaurant Brands’ risk. Hold. METRO INC. $37 (www.metro.ca) spent $355.2 million on share buybacks in the 12 months ended September 9, 2015. That’s equal to 4% of its $8.9-billion market cap. Under its new authorization, the supermarket operator can repurchase up to 7.4% of its outstanding shares by September 9, 2016. Buybacks raise earnings per share and other per-share calculations and give the remaining shareholders a larger stake in the company. Buy.
SUNCOR ENERGY INC., $36.67, Toronto symbol SU, has launched a hostile all-stock takeover offer for Canadian Oil Sands (Toronto symbol COS). Canadian Oil Sands’ main asset is its 36.74% stake in the massive Syncrude oil sands development near Fort McMurray, Alberta. It also operates the project. Suncor already owns 12.0% of Syncrude, so buying Canadian Oil Sands would give it effective control, with a 48.74% stake. Equipment failures and other problems have hurt Syncrude’s production in the past few years, and Suncor feels its expertise running similar projects will help Syncrude improve its efficiency and profits....
ENBRIDGE INC., $51.21, Toronto symbol ENB, has received regulatory approval to reverse the flow of crude oil on its Line 9 pipeline between Sarnia, Ontario, and Montreal. Under the plan, oil will now flow from Sarnia to Montreal. Enbridge will also increase the line’s capacity so it can handle heavy crude from Alberta’s oil sands. It took longer than expected for regulators to sign off, so the project’s cost jumped to $800 million from the company’s original estimate of $100 million. To put that in context, Enbridge earned $505 million, or $0.60 a share, in the three months ended June 30, 2015. The company still needs to finish some technical preparations, so it didn’t say when crude would start flowing through the line....
SUNCOR ENERGY INC., $35.07, Toronto symbol SU, has agreed to buy an additional 10.0% of the Fort Hills oil sands project in northern Alberta from France’s Total S.A. Following the purchase, Suncor will own 50.8% of Fort Hills, while Total will hold 29.2%. Teck Resources (see below) will continue to own the remaining 20.0%. Owning a majority interest will make it easier for Suncor to cut costs and make other changes in response to low crude prices....
MOLSON COORS CANADA INC., Toronto symbols TPX.A $107.34 and TPX.B $111.00, jumped 20% this week in response to Anheuser-Busch InBev’s offer to buy rival brewer SABMiller plc. In 2008, Molson Coors merged its U.S. brewing operations with those of SABMiller to form MillerCoors. Each company has a 50% voting interest in this joint venture, but SABMiller gets 58% of the profits, while Molson Coors gets 42%. To satisfy competition regulators, a combined Anheuser-Busch InBev and SABMiller would probably have to sell its stake in the MillerCoors joint venture....
BOMBARDIER INC., Toronto symbols BBD.A $1.89 and BBD.B $1.86, jumped 42% this week in response to media reports that a Chinese company has offered to buy a majority stake in its passenger-railcar business, Bombardier Transportation. The reported price of $7 billion U.S. to $8 billion U.S. is roughly 2.4 times Bombardier’s $4.2-billion (Canadian) market cap (or the value of all of its outstanding shares). The company has denied that it plans to sell the railcar business. However, it still intends to sell shares in Bombardier Transportation through an initial public offering later this year—though it will continue to own a majority stake....