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] $48 and ACO.Y [class II voting] $48; Income Portfolio, Utilities sector; Shares outstanding: 115.1 million; Market cap: $5.5 billion; Price-to-sales ratio: 1.3; Dividend yield: 2.1%; TSINetwork Rating: Above Average; www.atco.com) holds 53.2% of Canadian Utilities (see left). It also owns 75.5% of ATCO Structures & Logistics, which builds temporary buildings for construction and energyexploration firms; Canadian Utilities owns the remaining 24.5%. The drop in oil prices is hurting growth at the structures business. As a result, ATCO likely earned $3.02 a share in 2014, down 10.9% from 2013. But higher earnings from Canadian Utilities should raise its 2015 earnings to $3.39 a share, and the stock trades at 14.2 times that estimate. The $0.99 dividend yields 1.8%. Based on current prices, you can buy an ATCO share for $48 and get roughly $51 worth of Canadian Utilities. That means you get ATCO’s structures business, which provides around 25% of its earnings, for free....
SHAWCOR LTD. $38 (Toronto symbol SCL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.5 million; Market cap: $2.5 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.6%; TSINetwork Rating: Average; www.shawcor.com) makes sealants and coatings that keep oil and gas pipelines from rusting. It also manufactures industrial products, such as electrical wire and protective sheaths. Low oil prices are prompting oil and gas producers to delay new drilling projects in the Gulf of Mexico. As a result, ShawCor will write down the value of its pipe-coating facility in Texas. Meanwhile, the devaluation of Venezuela’s currency has prompted the company to write down its 50% joint venture in that country. These charges will cut ShawCor’s earnings by $80 million in the fourth quarter of 2014. To put that in context, it earned $115.5 million, or $1.90 a share, in the first nine months of the year....
BOMBARDIER INC. (Toronto symbols BBD.A $4.15 and BBD.B $4.14; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $7.1 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.4%; TSINetwork Rating: Average; www.bombardier.com) has won several orders for new regional jets, business jets and turboprop planes. Assuming these customers exercise all of their options, these deals are worth a total of $1.7 billion (all amounts except share prices and market cap in U.S. dollars). That’s equal to 9% of the company’s annual revenue of $19.5 billion. In addition, Bombardier has received an order for 42 passenger railcars from the operator of a public transit system near Paris, France. This deal is worth $484 million, and the company will begin delivering the trains in 2017. Bombardier B stock is a buy.
SUNCOR ENERGY INC. $35 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.5 billion; Market cap: $52.5 billion; Price-to-sales ratio: 1.2; Dividend yield: 3.2%; TSINetwork Rating: Average; www. suncor.com) gets 40% of its revenue and 65% of its earnings by producing oil and natural gas, mainly at its large Alberta oil sands projects. The remaining 60% of revenue and 35% of earnings come from its four oil refineries and 1,500 Petro-Canada gas stations. Big merger boosted results Suncor merged with rival Petro-Canada in 2009, increasing its revenue by 52.2%, from $25.5 billion in 2009 to $38.8 billion in 2011. Lower oil prices cut the company’s revenue to $38.5 billion in 2012. In 2013, Suncor sold most of its Western Canadian natural gas operations for $1 billion. However, higher oil prices offset the lower production, and its revenue rose to $40.3 billion....
RESTAURANT BRANDS INTERNATIONAL $48 (www.rbi.com) is the new company formed by the merger of Tim Hortons Inc. (old symbol THI) and Burger King Worldwide (old symbol BKW). Restaurant Brands is the world’s third-largest fast-food chain, after McDonald’s and Yum Brands, with 14,000 Burger King restaurants and 4,590 Tim Hortons outlets in 100 countries. In all, these locations have annual sales of over $23 billion U.S. Roughly 72% of Tim Hortons shareholders opted to receive 3.0879 shares of the new company for each Tim Hortons share they held. A further 26% chose the default option of $65.50 in cash plus 0.8025 of a Restaurant Brands share, while 2% picked the all-cash option of $88.50 a share....
In next week’s Successful Investor Hotline, we’ll reveal our #1 stock pick for 2015. Don’t miss this unique opportunity to profit. BCE INC., $54.35, Toronto symbol BCE, recently agreed to buy Glentel Inc. (Toronto symbol GLN), which sells mobile phones and subscription plans through 494 Canadian stores, mainly under the Wireless Wave banner. Glentel also has 735 U.S. outlets and 147 in Australia and the Philippines. The company will pay $594 million (50% cash and 50% in BCE common stock) for Glentel’s outstanding shares. If you include Glentel’s debt, the entire deal is worth $670 million. To put that in context, BCE earned $648 million, or $0.83 a share, in the three months ended September 30, 2014....
PLEASE NOTE: This is our last Hotline for 2014. Our next Hotline will go out on Friday, January 9, 2015.
ENCANA CORP., $16.41, Toronto symbol ECA, plans to invest more in its shale oil properties in 2015, even though lower oil prices will cut its cash flow.
In 2015, the company’s capital expenditures will be between $2.7 billion and $2.9 billion (all amounts expect share price in U.S. dollars), up from $2.6 billion this year.
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ENCANA CORP., $16.41, Toronto symbol ECA, plans to invest more in its shale oil properties in 2015, even though lower oil prices will cut its cash flow.
In 2015, the company’s capital expenditures will be between $2.7 billion and $2.9 billion (all amounts expect share price in U.S. dollars), up from $2.6 billion this year.
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TIM HORTONS INC., $99.00, Toronto symbol THI, has completed its merger with U.S.-based BURGER KING WORLDWIDE INC., $35.50, New York symbol BKW.
On Monday, December 15, 2014, the combined company, called Restaurant Brands International Inc., will begin trading on the Toronto and New York exchanges under the QSR symbol.
Restaurant Brands is the world’s third-largest fast-food restaurant operator, after McDonald’s and Yum Brands, with 14,000 Burger King restaurants and 4,590 Tim Hortons outlets in 100 countries. In all, these locations have annual sales of over $23 billion U.S.
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On Monday, December 15, 2014, the combined company, called Restaurant Brands International Inc., will begin trading on the Toronto and New York exchanges under the QSR symbol.
Restaurant Brands is the world’s third-largest fast-food restaurant operator, after McDonald’s and Yum Brands, with 14,000 Burger King restaurants and 4,590 Tim Hortons outlets in 100 countries. In all, these locations have annual sales of over $23 billion U.S.
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A key part of our three-pronged investing strategy is to downplay stocks in the broker/media limelight (the other two are invest mainly in well-established companies and spread your money across the five main economic sectors). Linamar is a good example of an out-of-the-limelight stock. Few brokers cover it, partly because its cyclical auto and industrial parts are not as exciting as, say, computer technologies. As well, the family of Linamar’s founder own 23.6% of the outstanding shares, which limits the possibility of a takeover. However, the company’s expertise helped it rebound strongly from the 2008 financial crisis and the bankruptcy of GM and Chrysler, two of its biggest clients. Today, it’s winning deals to supply engine parts to other automakers and industrial firms, and growing beyond North America. Linamar also stands to gain as carmakers rely more heavily on suppliers to help them meet tougher emission regulations....
Overall, the drop in oil prices is a favourable development for the universe of stocks we follow and recommend. It will cut into the earnings of our oil stock recommendations, of course. But for all other stocks we follow, and their customers, it will act like a major tax cut. Keep in mind that this oil price drop was widely anticipated, by us and other observers. Oil was bound to fall eventually, due to the rising output from shale oil production and new technological processes. In fact, some members of OPEC may have worked to undermine the oil market, in the hope that a drop in prices would stave off development of new sources of shale oil....