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
Thanks to a series of strategic acquisitions, Fortis’s assets have jumped from $4.6 billion in 2005 to $28.0 billion today. Expanding by acquisition is usually riskier than internal growth. That’s because new businesses often come with unexpected problems and costs that can offset the extra revenue and earnings they bring. Fortis cuts this risk by targeting established regulated utilities with predictable cash flows. The company plans to keep buying utilities that can benefit from its expertise, especially as today’s low interest rates cut its borrowing costs. At the same time, it’s investing in its current facilities, which will further spur its earnings growth....
ANDREW PELLER LTD. $17 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.3 million; Market cap: $243.1 million; Price-to-sales ratio: 0.8; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.andrewpeller.com) is a great example of a key part of our three-pronged investing strategy, which is to downplay stocks in the broker/media limelight (the other two are to invest mainly in well-established companies, and spread your money across the five main economic sectors). Peller is Canada’s second-largest wine producer, after Vincor International, but few brokers cover it due to its relatively small market cap. Even so, it has a long history of rising earnings and dividends. In its 2015 fiscal year, which ended March 31, 2015, Peller’s sales rose 6.0%, to $315.7 million from $297.8 million in 2014. That’s mainly because it launched several new products, including its skinnygrape spritzers and Panama Jack cocktails....
These four companies provide hard-to-replace services to oil and gas producers. That gives them a big advantage, particularly as oil prices have started to recover. Crude’s recent gains should also spur their earnings and give them more room for dividend hikes. SNC-LAVALIN GROUP INC. $46 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 152.1 million; Market cap: $7.0 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.2%; TSINetwork Rating: Average; www.snclavalin.com) fell to $36.24 in March 2015 after the RCMP charged the company and two subsidiaries for using bribes to win construction deals in Libya between 2001 and 2011. These are the same allegations that prompted SNC to replace its senior executives in 2012 and bring in a new program to enforce ethical practices. The company plans to fight these charges....
POTASH CORP. OF SASKATCHEWAN $38 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 834.2 million; Market cap: $31.7 billion; Price-to-sales ratio: 4.8; Dividend yield: 4.9%; TSINetwork Rating: Average; www.potashcorp.com) is thinking about selling its minority stakes in foreign fertilizer producers Israel Chemicals and SQM (Chile). However, it plans to keep its interests in Sinofert (China) and Arab Chemicals (Jordan). As of March 31, 2015, these four holdings had a book value of $2.8 billion U.S. A sale would free up cash for dividends or share buybacks. However, last year’s record crop harvests continue to depress potash prices. Potash Corp. is a hold.
BANK OF NOVA SCOTIA $66 (Toronto symbol BNS; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 1.2 billion; Market cap: $79.2 billion; Price-to-sales ratio: 3.6; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.scotiabank.com) has now purchased 51% of the credit card operations of Cencosud S.A., Chile’s largest retailer, for $280 million U.S. The deal made the bank Chile’s third-largest credit card issuer. Meanwhile, Bank of Nova Scotia earned $1.73 billion, or $1.42 a share, in its fiscal 2015 second quarter, which ended April 30, 2015. That’s up 1.6% from $1.70 billion, or $1.39, a year earlier. Revenue rose 3.7%, to $5.9 billion from $5.7 billion. Earnings at the Canadian banking division (48% of the bank’s total) rose 0.7%, mainly because it sold most of its shares in mutual fund provider CI Financial (Toronto symbol CIX) in 2014. If you exclude CI and adjust for a change in tax rates, this division’s earnings rose 9% on improving loan and deposit growth....
MOLSON COORS CANADA INC. (Toronto symbols TPX.A $89 and TPX.B $89; Conservative Growth and Income Portfolios, Consumer sector; Shares outstanding: 193.0 million; Market cap: $17.2 billion; Price-to-sales ratio: 3.3; Dividend yield: 2.3%; TSINetwork Rating: Average; www.molsoncoors.com) reported that its sales fell 14.2% in the first quarter of 2015, to $700.0 million from $816.0 million a year earlier (all amounts except share prices and market cap in U.S. dollars). Earnings per share declined 16.4%, to $0.46 from $0.55. The company’s worldwide beer volumes fell 3.5% on weaker sales in North America and Europe. Currency exchange rates and higher taxes also weighed on its results. However, Molson Coors’ ongoing cost controls and international expansion—it recently acquired two breweries in India—improve its long-term prospects. The class B shareholders elect three directors, while the A shareholders elect 12. However, the class B shares are more liquid and receive the same dividend....
A great way to diversify your Finance sector holdings beyond the big banks is to buy shares of Great-West Lifeco and IGM Financial. Both companies lead their fields, trade at low multiples to earnings and have a history of rising dividends. GREAT-WEST LIFECO INC. $37 (Toronto symbol GWO; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 997.5 million; Market cap: $36.9 billion; Priceto- sales ratio: 0.9; Dividend Yield: 3.5%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) is one of Canada’s largest insurance companies, with $1.2 trillion of assets under administration. It also offers mutual funds, retirement planning and wealth management. Power Financial (Toronto symbol PWF) owns 67.1% of Great-West. The company continues to expand in Ireland. In 2013, it paid $1.75 billion for Irish Life Group, a major pension manager and life insurance provider. It will also soon complete its purchase of the Irish operations of Legal & General Group for an undisclosed sum. This business provides investment and tax-planning services to wealthy individuals....
CAE INC. $15 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 267.2 million; Market cap: $4.0 billion; Price-to-sales ratio: 1.8; Dividend yield: 1.9%; TSINetwork Rating: Average; www.cae.com) has won a new contract to train pilots for the U.S. Army and Air Force. As a result, the company will build a new training facility at Dothan Regional Airport in Alabama. This eight-year deal is worth $200 million U.S. To put that in context, CAE’s revenue was $2.2 billion (Canadian) in the fiscal year ended March 31, 2015. Military clients supply about 40% of the company’s revenue, which cuts its reliance on selling flight simulators to cyclical commercial airlines. CAE is our #1 buy for 2015.
CENOVUS ENERGY INC. $21 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 828.4 million; Market cap: $17.4 billion; Price-to-sales ratio: 0.9; Dividend yield: 5.0%; TSINetwork Rating: Average; www.cenovus.com) has temporarily shut down its Foster Creek oil sands project in northern Alberta, as forest fires in the area are hindering traffic on the main access road to the site. Cenovus own 50% of Foster Creek, while U.S.-based ConocoPhillips (New York symbol COP) owns the other 50%. In the first quarter of 2015, Cenovus’s share of this project’s output was 68,000 barrels a day, or 31% of its total daily oil production of 218,000 barrels. The fires have also forced other oil projects in Alberta to close. In all, these operations account for 9% of the province’s total production. However, the shutdowns have increased the spot price of Western Canadian crude, which should help Cenovus offset the lost revenue....
BOMBARDIER INC. (Toronto symbols BBD.A $2.55 and BBD.B $2.53; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $4.4 billion; Price-to-sales ratio: 0.3; Dividend suspended in February 2015; TSINetwork Rating: Extra Risk; www.bombardier.com) plans to sell shares in its transportation division to the public. This business makes passenger railcars and accounts for 45% of Bombardier’s total revenue. The company expects to complete the sale in the fourth quarter of 2015. The new shares will mainly trade on Germany’s stock exchange because that’s where this business is based. Bombardier will retain a majority stake in this new company. Bombardier also recently suspended its dividend and sold new shares to shore up its balance sheet. The cash should help the company finish developing its new CSeries jet. Bombardier has firm orders for 243 CSeries planes. If buyers exercise their options and other agreements, that figure would rise to 603 aircraft with a total value of about $39 billion U.S....