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
BCE INC., $45.04, Toronto symbol BCE, rose 6% this week after it reported much-higher-than-expected earnings. The company also raised its dividend for the eighth time since the fourth quarter of 2008. In the three months ended June 30, 2012, BCE earned $788 million, or $1.02 a share. That’s up 18.9% from $663 million, or $0.86 a share, a year earlier. These figures exclude costs to integrate recent acquisitions and gains on investment sales. On that basis, the latest earnings easily beat the consensus estimate of $0.81 a share. Overall revenue fell 0.6%, to $4.9 billion from $5.0 billion. Revenue at the company’s traditional telephone business (which supplies 57% of BCE’s overall revenue) fell 3.9%, partly due to strong competition from cable companies....
TransCanada continues to attract a lot of media attention, mainly because environmentalists and some politicians oppose its planned Keystone XL pipeline, which would pump crude from Alberta’s oil sands to refineries in Texas and Louisiana. However, Keystone XL is just one of the many growth projects TransCanada is working on. The others—including big investments in its nuclear power business—have received much less attention, but they still enhance the company’s long-term prospects. They should also give it plenty of cash for dividends. TRANSCANADA CORP. $45 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 704.0 million; Market cap: $31.7 billion; Priceto- sales ratio: 3.5; Dividend yield: 3.9%; TSINetwork Rating: Above Average; www.transcanada.com) operates a 68,500- kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. The company’s pipelines supply 20% of North America’s natural gas. In 2011, they provided 49% of TransCanada’s revenue and 60% of its earnings....
TECK RESOURCES LTD. $29 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 586.0 million; Market cap: $17.0 billion; Priceto- sales ratio: 1.4; Dividend yield: 2.8%; TSINetwork Rating: Average; www.teck.com) is selling more metallurgical coal and copper thanks to recent expansion projects. Coal sales in the three months ended June 30, 2012 rose 19.6%, to 6.7 million tonnes from 5.6 million a year earlier. Copper sales rose 10.4%, to 85,000 tonnes from 77,000 tonnes. However, slowing growth in China and India cut coal prices by 25.7% from a year earlier. Copper prices fell 13.8%....
These three leading oil producers are aggressively expanding their oil sands operations. These projects are more expensive to develop than conventional deposits, and the recent drop in oil prices could hurt their profitability. However, their reserves should last for decades, and their operating costs tend to fall after they start up. Moreover, these companies’ refineries, which convert oil into gasoline and other fuels, help shield them from volatile oil and gas prices. That’s because refineries pay less for crude when oil prices decline; this enhances their profits. SUNCOR ENERGY INC. $32 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.5 billion; Market cap: $48.0 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.6%; TSINetwork Rating: Average; www.suncor.com) became Canada’s largest integrated oil company in 2009, when it merged with Petro- Canada....
SNC-LAVALIN GROUP INC. $37 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $5.6 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.4%; TSINetwork Rating: Average; www.snclavalin.com) earned $32.5 million, or $0.21 a share, in the three months ended June 30, 2012. That’s down 68.2%, from $102.2 million, or $0.67 a share, a year earlier. The company spent $50 million more than it expected on a power plant in Tunisia and a petrochemical plant in Russia. That was the main reason for the lower earnings. The stock has also come under pressure in the past few months over $56 million U.S. in unusual payments that the company made to agents it hired to secure certain construction contracts. However, this matter has had little impact on SNC’s ability to win new engineering deals: revenue rose 14.2% in the quarter, to $1.9 billion from $1.7 billion. SNC-Lavalin is a buy.
ENBRIDGE INC. $39 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 797.0 million; Market cap: $31.1 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.9%; TSINetwork Rating: Above Average; www.enbridge.com) recently repaired a leaking oil pipeline in Wisconsin. The company has faced criticism over leaks like this. That could hurt its proposed $5.5-billion Northern Gateway project, which would pump oil from Edmonton to Kitimat, B.C. However, Enbridge still has a strong safety record, and it has pledged to spend an extra $500 million on thicker steel and extra monitoring for leaks. Enbridge is a buy.
HOME CAPITAL GROUP INC. $48 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.7 million; Market cap; $1.7 billion; Price-to-sales ratio: 2.2; Dividend yield: 1.8%; TSINetwork Rating: Average; www.homecapital.com) is a mortgage lender that serves borrowers who don’t meet the stricter standards of larger, traditional lenders, like banks. Even though Home Capital caters to riskier borrowers, it avoids huge credit losses by identifying problem loans early. It then uses this information to restructure a borrower’s repayment terms and adjust its lending policies. In the three months ended June 30, 2012, Home Capital’s earnings rose 10.4%, to $53.2 million, or $1.54 a share. That’s despite a higher corporate tax rate in Ontario, which cut Home Capital’s earnings by $2.0 million. A year earlier, the company earned $48.2 million, or $1.38 a share....
Both CAE and Nordion are developing new products that help them tap into profitable new markets. That makes both companies less reliant on their core businesses—and enhances their long-term prospects. CAE INC. $10 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 258.3 million; Market cap: $2.6 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.6%; TSINetwork Rating: Average; www.cae.com) spends around 10% of its annual revenue of $1.8 billion on research. That helps it develop simulators for new planes, like the Boeing 787 Dreamliner and Airbus A380. The company is also using these funds to apply its expertise to new fields. For example, CAE is now making simulators and other products, including lifelike mannequins, to train paramedics and medical students. It is also focusing on the mining industry: Right now, mining firms are using software that CAE developed to plan new mines and measure reserves. These new businesses, which both have strong growth potential, now supply 5% of CAE’s revenue....
TIM HORTONS INC. $52 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 157.4 million; Market cap: $8.2 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.6%; TSINetwork Rating: Average; www.timhortons.com) has raised the prices of muffins, sandwiches and other items at its coffee-and-donut stores in Canada and the U.S. That’s because the drought in North America is pushing up its costs for wheat, canola oil and other ingredients. The increases are unlikely to hurt customer traffic or sales, particularly because the company did not increase coffee prices. Tim Hortons is a buy.
RESEARCH IN MOTION INC. $7.56 (Toronto symbol RIM; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 524.2 million; Market cap: $4.0 billion; Price-to-sales ratio: 0.2; No dividends paid; TSINetwork Rating: Above Average; www.rim.com) has launched a version of its PlayBook tablet computer that can run on Long-Term Evolution (LTE) wireless networks, which are up to five times faster than current networks. Until now, the PlayBook used slower Wi-Fi technology to access the Internet. These upgrades will help the PlayBook compete with other LTE-capable tablets. However, RIM’s earnings will remain under pressure until it launches smartphones that use its new BlackBerry 10 operating system. The company expects to start selling these phones in early 2013. RIM is a hold, but only for aggressive investors....