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.
[text_ad]
Read More
Close
Dividend Stocks Library Archive
BOMBARDIER INC., Toronto symbols BBD.A $3.70 and BBD.B $3.63, has fallen 5% in the past two weeks on concern about further setbacks for its new CSeries passenger jet. In late May 2014, an engine problem forced the company to suspend testing. The engine’s manufacturer has since investigated and feels it has fixed the fault. Bombardier is now testing the modified engines at its Montreal plant and plans to resume test flights by the end of this month. These problems have prompted Sweden’s Braathens Aviation to withdraw as the CSeries’ first customer. Braathens has not cancelled its order for 10 planes, but it will postpone delivery from the second half of 2015 to 2016 or later....
TIM HORTONS INC., $87.40, Toronto symbol THI, jumped 27% this week after agreeing to a friendly takeover offer from Miami-based Burger King Worldwide (New York symbol BKW). The combined firm would be the world’s third-largest fast-food operator, after McDonald’s and Yum Brands, with annual sales of $23 billion U.S. and 18,000 restaurants in over 100 countries. Canada will supply 67% of the merged company’s revenue, followed by the U.S. (20%) and other countries (13%). The Tim Hortons and Burger King chains will operate independently but will probably share some back office and distribution networks. Tim Hortons can also use Burger King’s expertise to expand in the U.S. and other countries....
ROYAL BANK OF CANADA, $80.80, Toronto symbol RY, earned $2.4 billion in the three months ended July 31, 2014, up 10.2% from $2.2 billion a year earlier. Per-share earnings rose 11.0%, to $1.62 from $1.46, on fewer shares outstanding. These figures exclude unusual items, such as a $40-million loss on the recent sale of Royal’s Jamaican banking operations. On this basis, the latest earnings beat the consensus estimate of $1.54 a share. Revenue jumped 25.2%, to $9.0 billion from $7.2 billion. The bank set aside $283 million to cover bad loans in the latest quarter, up 6.0%, from $267 million. That’s mainly due to higher provisions at its Caribbean and Canadian corporate lending operations....
CAE INC. $13.45, Toronto symbol CAE, plans to sell its mining operations, which make simulators for training workers to operate underground trucks, loaders and drills. This business supplies just 2% of the company’s revenue. The mining operations were part of CAE’s New Core Markets division, which applies the company’s flight simulator expertise to other industries. This division, now called Healthcare, will focus on medical-simulation products, such as mannequins for training nurses and medical students. In its fiscal 2015 first quarter, which ended June 30, 2014, CAE’s earnings from ongoing operations fell 2.0%, to $43.6 million from $44.5 million a year earlier. Earnings per share were unchanged at $0.17, missing the consensus estimate of $0.19. Lower earnings from the company’s military-related businesses offset strong gains from its commercial division....
Great-West Lifeco and IGM are both in a strong position to profit as baby boomers sign up for retirement planning services and buy supplemental accident and disability insurance. Both companies also trade at low multiples to their earnings and will probably raise their dividends in 2015. They’re also a great way to diversify your Finance sector holdings beyond Canada’s big five banks. If you can accept the added risk, we also like Home Capital (see page 83). GREAT-WEST LIFECO INC. $32 (Toronto symbol GWO; Conservative Growth and Income Portfolios, Finance sector; Shares outstanding: 998.9 million; Market cap: $32.0 billion; Price-to-sales ratio: 1.1; Dividend Yield: 3.8%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) is Canada’s secondlargest insurance company after Manulife Financial (Toronto symbol MFC). It also offers mutual funds, retirement planning and wealth management. Power Financial (Toronto symbol PWF) owns 67.0% of Great-West....
During the 2008/2009 financial crisis, the U.S. and Europe provided huge support to their banks, to keep them solvent. Thanks to Canada’s stricter banking regulations, our big five banks (Bank of Montreal, Bank of Nova Scotia, CIBC, Royal and TD) survived the crisis without government financial assistance. Ottawa now wants to improve the stability of our banks all the more, in the event of a future crisis. Under the proposed “bail-in” model, if a bank becomes insolvent, it will have to convert some of its debt to new common shares. That would dilute the value of existing holdings. (Canadian Deposit Insurance would continue to protect depositors.)...
HOME CAPITAL GROUP INC. $55 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 70.1 million; Market cap; $3.9 billion; Price-to-sales ratio: 4.0; Dividend yield: 1.3%; TSINetwork Rating: Average; www. homecapital.com) gets 90% of its revenue by offering mortgages to borrowers who don’t meet the stricter standards of larger, traditional lenders, like banks. Clients include self-employed people and recent immigrants with limited credit histories. The remaining 10% of its revenue mainly comes from credit cards and other loans to consumers and businesses. Today’s low interest rates continue to fuel strong real estate sales, particularly in cities like Toronto and Vancouver. However, a rate increase would undoubtedly slow sales—and mortgage demand. A sudden drop in home prices could also force some borrowers to stop repaying their loans....
BCE INC. $48 (Toronto symbol BCE; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 778.3 million; Market cap: $37.4 billion; Price-to-sales ratio: 1.8; Dividend yield: 5.1%; TSINetwork Rating: Above Average; www.bce.ca) has agreed to pay $3.95 billion in cash and stock for the 56% of BELL ALIANT INC. $31 (Toronto symbol BA; Conservative Growth and Income Portfolios, Utilities sector; Shares outstanding: 227.8 million; Market cap: $7.1 billion; Price-to-sales ratio: 2.6; Dividend yield: 6.1%; TSINetwork Rating: Average; www.bellaliant.ca) that it doesn’t already own. Bell Aliant investors have three options: $31.00 in cash; 0.6371 of a BCE share; or $7.75 in cash plus 0.4778 of a BCE share. BCE will cap the cash portion at 25% of the total payout. We recommend the all-stock option. That way, you can defer capital gains taxes on the BCE shares you get. However, if adding more shares would push up your BCE holdings to more than, say, 10% of your portfolio, you should select the all-cash option....
Inflation remains low in Canada. That’s one reason why interest rates remain at today’s historically low levels. However, the long-term outlook is for higher rates, as the expansion of the money supply in the past few years will likely spur inflation. We continue to advise against investing in bonds, because low interest rates hurt their appeal, while rising rates would push down their future value. If you need stable income, we prefer highyielding utilities like these four. Their dividends also qualify for the dividend tax credit....
MAPLE LEAF FOODS INC. $20 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 141.9 million; Market cap: $2.8 billion; Price-to-sales ratio: 0.6; Dividend yield: 0.8%; TSINetwork Rating: Average; www.mapleleaf.ca) ships only a small portion of its pork products to Russia, so that country’s recent ban on food imports from Canada will have little effect on its sales and earnings. Pork prices have moved up recently, because a virus has cut hog supplies. As a result, consumers have shifted to beef and other meats. However, the Russian pork ban could cut prices in Canada, which would help spur demand for Maple Leaf’s products. Meanwhile, Maple Leaf’s sales rose 9.6% in the three months ended June 30, 2014, to $831.8 million from $759.3 million a year earlier, as higher selling prices offset lower volumes. The company continues to restructure, including closing older plants. Its loss narrowed to $0.13 a share from $0.25....