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., $74.72, Toronto symbol CP, has appointed Hunter Harrison as a director and its new chief executive officer. Mr. Harrison is the former CEO of Canadian National Railway Co. (Toronto symbol CNR). CP feels Mr. Harrison will duplicate his success at CN, which included improving efficiency and speeding up deliveries. New trains and the recent drop in oil prices should also boost CP’s profitability....
ENCANA CORP., $20.37, Toronto symbol ECA, continues to produce more oil and natural gas liquids (NGLs), such as ethane, propane and butane. NGLs tend to be priced at the same level as crude oil. The company is shifting toward oil and NGLs because low natural gas prices are cutting profits at its regular gas business, which supplied 95% of its overall production in the first quarter of 2012. Encana does not plan to cut its natural gas production. This week, Encana announced that it will spend an extra $600 million (all amounts except share price in U.S. dollars) on its oil and NGL properties this year. The company had originally planned to spend $2.9 billion on all of its capital projects in 2012....
BOMBARDIER INC., Toronto symbols BBD.A $4.04 and BBD.B $3.91, rose 5% this week after the company received a firm order for 100 of its Challenger business jets from NetJets Inc., a private company owned by billionaire investor Warren Buffett. In addition to the implied endorsement by Mr. Buffett, this sale is worth $2.6 billion (all amounts except share prices in U.S. dollars), or 13% of Bombardier’s annual sales of $20 billion. The company will begin delivering these planes in 2014. NetJets also has an option to buy an additional 175 planes. If it exercises this option, the value of the entire order would rise to $7.3 billion. And if you include a related long-term contract to maintain these planes, the value of the entire agreement could reach $9.6 billion....
Canadian Pacific Railway is our #1 buy for 2012. However, we also have a high opinion of its larger rival, Canadian National Railway. CN has thrived since it became a public company in 1995, thanks to a series of acquisitions that greatly expanded its U.S. operations. That has helped CN profit from the North American Free Trade Agreement (NAFTA), which spurred a rapid rise in trade volumes between Canada, the U.S. and Mexico. CN is now in a strong position to gain from rising trade with Asia. Moreover, the company’s ongoing focus on improving its efficiency should keep fuelling its earnings growth and give it more cash for dividends....
CANADIAN PACIFIC RAILWAY LTD. $73 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 170.9 million; Market cap: $12.5 billion; Price-to-sales ratio: 2.4; Dividend yield: 1.9%; TSINetwork Rating: Above Average; www.cpr.ca) has attracted a lot of media attention lately. That’s mainly due to efforts by a U.S.-based investment firm that wants to improve its performance and possibly spark a takeover offer. In our three-part Successful Investor portfolio strategy, we advise investors to invest mainly in well-established companies, spread your money out across the five main economic sectors, and downplay stocks that are in the broker/media limelight, which can bloat investor expectations. Downturns can be brutal when stocks fail to live up to those inflated expectations. So, investors have asked why we chose a #1 stock that’s in what they see as ‘the limelight’. The difference is in the definition....
These three industrial stocks are more volatile than our more conservative picks, like CP Rail and CN Rail (see page 61). Even so, their rising sales, healthy balance sheets and strong reputations in niche markets help temper their risk. All three also trade at attractive multiples to earnings. Moreover, they all kept paying dividends during the recession. However, we only see two as buys right now. SNC-LAVALIN GROUP INC. $39 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 161.1 million; Market cap: $6.3 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.3%; TSINetwork Rating: Average; www.snclavalin.com) is a leading Canadian engineering and construction company. It specializes in large-scale public works projects, such as roads, bridges, transit systems and water-treatment plants....
BANK OF NOVA SCOTIA $52 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.1 billion; Market cap: $57.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.scotiabank.com) has agreed to sell Scotia Plaza, its 68-storey office building in downtown Toronto. Under the terms of the deal, Dundee REIT (Toronto symbol D.UN) and H&R REIT (Toronto symbol HR.UN) will pay Scotia $1.3 billion for the building when the sale closes, probably by June 30, 2012. Dundee will own two-thirds of the property, and H&R will own the remaining third. The bank will remain as the anchor tenant. Meanwhile, Bank of Nova Scotia earned $1.5 billion in the three months ended April 30, 2012. That’s up 16.1% from $1.3 billion a year earlier. Earnings per share rose 8.5%, to $1.15 from $1.06, on more shares outstanding. Revenue rose 1.4%, to $4.7 billion from $4.6 billion. Strong gains at its international operations offset slower growth at its Canadian retail banking division....
CENOVUS ENERGY INC. $32 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 755.6 million; Market cap: $24.2 billion; Price-to-sales ratio: 1.4; Dividend yield: 2.8%; TSINetwork Rating: Extra Risk; www.cenovus.com) has received regulatory approval to develop its Narrows Lake oil sands project in northern Alberta; U.S.-based ConocoPhillips (New York symbol COP) owns 50% of this property. Narrows Lake could begin operating in 2017. When it reaches full capacity, it should produce 130,000 barrels per day (Cenovus’s share is 65,000 barrels). To put that in context, Cenovus produced an average of 156,850 barrels per day in the first quarter of 2012. Narrows Lake’s reserves should last 40 years. The company plans to use a new technique, called a solventaided process, to extract the oil from Narrows Lake. This approach will add to the project’s construction and development costs, but it should let the partners recover up to 15% more oil than current methods....
ANDREW PELLER LTD. $9.93 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.9 million; Market cap: $148.0 million; Price-to-sales ratio: 0.5; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.andrewpeller.com) is Canada’s second-largest wine producer, after Vincor Canada. Peller operates wineries in B.C., Ontario and Nova Scotia. It also imports wines and sells home-winemaking kits. In its 2012 fiscal year, which ended March 31, 2012, Peller’s sales rose 4.3%, to $276.9 million from $265.4 million in fiscal 2011. That’s because the company continues to launch new wines, particularly higher-priced premium wines. Its sales also benefited from a new joint venture with Wayne Gretzky Estate Winery and a recently purchased home-winemaking business....
Great-West and IGM have moved down lately due to concerns over slowing economic growth and volatile stock markets. However, both companies are leaders in their fields, and both are cheap in relation to their earnings. They also have long histories of raising their dividends. GREAT-WEST LIFECO INC. $21 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 949.8 million; Market cap: $19.9 billion; Price-to-sales ratio: 0.7; Dividend Yield: 5.9%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) is Canada’s largest insurance company, with $523.0 billion of assets under administration. It also sells mutual funds, as well as retirement-planning and wealthmanagement services. Canada accounts for 53% of the company’s earnings, followed by Europe (31%) and the U.S. (16%). In the three months ended March 31, 2012, Great-West’s earnings rose 8.7%, to $451 million, or $0.48 a share. A year earlier, it earned $415 million, or $0.44 a share. Revenue rose 3.9%, to $6.5 billion from $6.3 billion....