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
CANADIAN PACIFIC RAILWAY LTD., $204.48, Toronto symbol CP, continues to benefit from lower fuel prices and an aggressive cost-cutting plan, but the slowing economy is hurting its freight volumes and revenue. In the three months ended June 30, 2015, the railway earned $404 million, up 8.9% from $371 million a year earlier. Per-share profits jumped 16.1%, to $2.45 from $2.11, on fewer shares outstanding. These results exclude unusual items, such as a foreign-exchange loss on CP’s U.S. dollar-denominated debt. On that basis, they just missed the consensus estimate of $2.46. Revenue fell 1.8%, to $1.65 billion from $1.68 billion, also falling short of the consensus forecast of $1.68 billion....
BANK OF NOVA SCOTIA, $64.37, Toronto symbol BNS, is paying an undisclosed sum to Citigroup (New York symbol C) for its retail-banking operations in Panama and Costa Rica, including 27 branches. The bank expects to close the deal in the next few months. The move will nearly triple its customer base in these two countries, from 137,000 to 387,000. It will also make Bank of Nova Scotia the second-largest credit card provider in both nations, with 18% of the market in Panama and 15% in Costa Rica. The bank entered Panama in 1974 and Costa Rica in 1995. This long history cuts the risk of expanding in these countries....
Since 2000, Telus has spent $27 billion—roughly its current market cap—to boost the speed and capacity of its wireless and high-speed Internet networks. Meantime, its strong customer service is helping it hang on to current subscribers. These strengths should keep fuelling the company’s stock, which is up 155% in the past 15 years, while its rising earnings mean its dividend hikes and share buybacks will continue. TELUS CORP. $45 (Toronto symbol T; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 605.5 million; Market cap: $27.2 billion; Price-to-sales ratio: 2.2; Dividend yield: 3.7%; TSINetwork Rating: Above Average; www.telus.com) is Canada’s second-largest wireless carrier, after Rogers Communications, with 8.2 million subscribers. Wireless now supplies 55% of Telus’s revenue and 66% of its earnings....
HOME CAPITAL GROUP INC. $32 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 70.2 million; Market cap; $2.2 billion; Price-to-sales ratio: 3.9; Dividend yield: 2.8%; TSINetwork Rating: Average; www.homecapital.com) caters to borrowers who don’t meet the stricter standards of traditional banks, such as the self-employed and recent immigrants with limited credit histories. The stock fell 20% after the company said it sold $1.29 billion of new home mortgage loans in the second quarter of 2015, down 15.7% from $1.53 billion a year earlier. Home Capital sells most of these loans through independent mortgage brokers, and it has cut ties with some of them over concerns about inaccurate loan applications. In all, these brokers supplied 15% of the company’s new mortgages....
Like Telus (see page 71), BCE and Manitoba Telecom are speeding up their networks to profit from demand for faster downloads—both through high-speed Internet and wirelessly. Both companies can easily afford to make these investments and maintain their dividends, but we feel BCE is the better choice right now. BCE INC. $55 (Toronto symbol BCE; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 841.9 million; Market cap: $46.3 billion; Price-to-sales ratio: 2.2; Dividend yield: 4.7%; TSINetwork Rating: Above Average; www.bce.ca) is Canada’s largest telephone provider, with 7.0 million customers in Ontario, Quebec and the Atlantic provinces. It also has 3.3 million highspeed Internet users and 2.7 million TV subscribers....
TRANSCANADA CORP. $51 (Toronto symbol TRP; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 708.9 million; Market cap: $36.2 billion; Price-to-sales ratio: 3.5; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.transcanada.com) still hopes its Keystone XL pipeline will be approved, even though Alberta’s new NDP government has withdrawn the province’s support for the project. Keystone XL would pump crude from Alberta’s oil sands to the U.S. Gulf Coast. Meanwhile, the company has improved its efficiency and adopted new technologies, both of which are helping it pump more oil through its existing Keystone pipeline between Alberta and refineries in Illinois. TransCanada recently freed up 10,000 to 15,000 barrels on this 590,000-barrel-a-day line. Long-term contracts account for 90% of Keystone’s current capacity, so the extra space will help TransCanada meet demand for urgent shipments. TransCanada is a buy....
BOMBARDIER INC. (Toronto symbols BBD.A $1.99 and BBD.B $1.90; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $3.3 billion; Price-to-sales ratio: 0.2; Dividend suspended in February 2015; TSINetwork Rating: Extra Risk; www.bombardier.com) is down 52% since the start of 2015, mainly due to rising costs and delays to develop its new CSeries passenger jet. In addition, lower oil prices have diminished the main appeal of this plane—that it’s 20% more fuel-efficient than comparable models. What’s more, Bombardier’s new management team is reviewing its Global business jet program, which could postpone the planned launch of new models in 2016 and 2017. Bombardier recently raised $3.1 billion U.S. by selling new shares and notes. It also plans to sell shares in its transportation division, which makes passenger railcars. These moves should give it enough resources to finish the CSeries. Bombardier expects to begin delivering this new aircraft in 2016....
Canada is now negotiating the Trans-Pacific Partnership, which would lower trade barriers between 12 countries in the Asia-Pacific region. The TPP could also open Canada’s highly regulated agricultural industry to foreign competitors. That would hurt Saputo and Maple Leaf Foods (see box)—at least initially—though the deal would also help them export their products to more markets. Still, we feel both stocks will make little progress until the TPP is finalized. SAPUTO INC. $30 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 392.9 million; Market cap: $11.8 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.7%; TSINetwork Rating: Average; www.saputo.com) is Canada’s largest producer of dairy products, including milk, butter and cheese. The company also operates dairies in the U.S., Australia and Argentina....
MAPLE LEAF FOODS INC. $24 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 143.1 million; Market cap: $3.4 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.3%; TSINetwork Rating: Average; www.mapleleaf.ca) is Canada’s largest food-processing company. It mainly sells its products, including fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands. The company will soon complete a seven-year restructuring that mainly involves closing older plants and shifting their operations to newer facilities. However, it will take several months for the new plants to reach full capacity and increase Maple Leaf’s earnings. Even so, the company expects to increase its gross profit margin to 10% in 2015 from just 0.5% in 2014. The stock has gained 23% since the start of the year and now trades at a somewhat high 31.6 times the $0.76 a share Maple Leaf will likely earn in 2015. The $0.32 dividend yields 1.3%....
More people are shopping online, forcing retailers to close stores and print fewer advertising flyers. This trend is weighing on mall operators, like RioCan, and printing firms, such as Transcontinental (see box). Both companies are diversifying beyond retail in response. That cuts their risk and supports their current payout rates. RIOCAN REAL ESTATE INVESTMENT TRUST $28 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 317.9 million; Market cap: $8.9 billion; Price-to-sales ratio: 6.9; Dividend yield: 5.0%; TSINetwork Rating: Average; www.riocan.com) owns all or part of 290 shopping centres in Canada, including 15 under development. These holdings account for 84% of the trust’s rental revenue. The remaining 16% comes from 48 malls in the U.S. Former tenant Target Canada recently abandoned 26 stores in RioCan’s malls, representing 1.9% of the trust’s annual rental revenue....