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
TRANSCANADA CORP. $43 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 704.1 million; Market cap: $30.3 billion; Price-to-sales ratio: 3.3; Dividend yield: 4.1%; TSINetwork Rating: Above Average; www.transcanada.com) gets 9% of its revenue from its minority stake in the Bruce nuclear power complex in central Ontario. The company and its partners are nearly finished upgrading two of the plant’s eight reactors, which have been out of service since 1995. They plan to restart both by September 30, 2012. The plant will then supply 25% of Ontario’s power. Right now, Bruce’s six operating reactors account for 19% of the province’s power. TransCanada is a buy.
CAE INC. $10 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 257.9 million; Market cap: $2.6 billion; Price-to-sales ratio: 1.5; Dividend yield: 1.6%; TSINetwork Rating: Average; www.cae.com) makes flight simulators and runs pilot training schools. In its 2012 third quarter, which ended December 31, 2011, CAE’s revenue rose 10.3%, to $453.1 million from $410.8 million a year earlier. Demand for the company’s pilot training services continues to rise as airlines upgrade their fleets. That pushed up revenue by 13% at CAE’s civil division (which supplies 45% of the company’s overall revenue)....
Companies that supply equipment and services to oil and gas explorers give investors another way to profit from rising oil prices. To cut your risk, stick with proven market leaders like Precision Drilling and ShawCor. PRECISION DRILLING CORP. $8.91 (Toronto symbol PD; Aggressive Growth Portfolio, Resource sector; Shares outstanding: 276.1 million; Market cap: $2.5 billion; Price-to-sales ratio: 1.3; No dividends paid since February 2009; TSINetwork Rating: Extra Risk; www.precisiondrilling.com) provides contract drilling services to land-based oil and gas producers, mainly in North America. It had 337 rigs in service at the end of 2011....
BOMBARDIER INC. (Toronto symbols BBD.A $4.04 and BBD.B $3.93; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $6.9 billion; Price-to-sales ratio: 0.3; Dividend yield: 2.5%; TSINetwork Rating: Average; www.bombardier.com) has won a contract to build 300 subway cars for the New York City public transit system. The company will begin delivering these trains in 2016. The $600-million deal is small next to Bombardier’s annual revenue of $18.3 billion (all amounts except share price and market cap in U.S. dollars). However, orders like this will help Bombardier win more contracts from other major cities. Bombardier is a buy. The cheaper class B shares are the better choice.
IGM FINANCIAL INC. $46 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 256.7 million; Market cap: $11.8 billion; Price-to-sales ratio: 4.3; Dividend yield: 4.7%; TSINetwork Rating: Above Average; www.igmfinancial.com) reports that it had $124.1 billion of assets under management as of March 31, 2012. That’s down 7.4% from $134.1 billion a year earlier. Lower share prices were the main reason for the drop. IGM’s fee income rises and falls with the value of the mutual funds and other securities it manages, so the company’s revenue and earnings suffer when the value of these assets falls. Still, low interest rates will probably spur investors to shift from fixed-income investments to equity-based mutual funds over the next few months. IGM Financial is a buy....
LOBLAW COMPANIES LTD. $33 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 281.4 million; Market cap: $9.3 billion; Price-to-sales ratio: 0.3; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.loblaw.ca) is buying most of the Zellers department store chain’s prescription drug accounts. U.S.-based Target Corp. (New York symbol TGT) recently acquired over 220 Zellers stores as part of its plan to expand into Canada. However, it will take Target several months to renovate these locations. As a result, Target decided not to take over Zellers’ drug business and will instead open its own pharmacies in these stores. Loblaw will pay $35 million for the Zellers accounts. That’s equal to 5% of its 2011 earnings of $769 million, or $2.73 a share. Selling drugs is more profitable than sales of food or general merchandise, so these new accounts should boost Loblaw’s earnings. The purchase will also draw more traffic to Loblaw’s stores....
TECK RESOURCES LTD. $35 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 586.0 million; Market cap: $20.5 billion; Price-to-sales ratio: 1.8; Dividend yield: 2.3%; TSINetwork Rating: Average; www.teck.com) is a leading producer of metallurgical coal, a key ingredient in steelmaking. Coal accounted for 49% of Teck’s 2011 revenue and 57% of its earnings. The company also produces copper (27%, 28%) and zinc (24%, 15%). Teck continues to benefit as the recovering global economy pushes up commodity prices. As well, in 2008, the company bought the 80.05% of Fording Canadian Coal that it didn’t already own. This purchase has further spurred Teck’s growth.
Quick rebound from downturn
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LINAMAR CORP. $21 (www.linamar.com) earned $1.64 a share in 2011. That’s up 20.6% from $1.36 in 2010. Sales rose 28.4%, to $2.9 billion from $2.2 billion. The company continues to win new contracts to supply transmissions and other parts to carmakers in Asia and Europe. It’s also seeing stronger sales of its non-automotive products, such as self-propelled elevating work platforms. Buy. NORDION INC. $9.08 (www.nordion.com) continues to have success with TheraSphere, a process that it developed for treating liver cancer using millions of small glass beads that contain radioactive materials. The company recently developed a new method that gives doctors more control over the size of each dosage. That will limit radiation exposure for patients and for health care workers. Buy. POTASH CORP. OF SASKATCHEWAN $43 (www.potashcorp.com) has cut potash production because rising inventories have pushed down prices. However, poor weather in South America will likely cut this year’s soybean harvest. That would push up soybean prices and encourage farmers around the world to apply more fertilizer to boost their crop yields. Hold.
PLEASE NOTE: Our next Hotline will go out on Friday, April 13, 2012. MOLSON COORS CANADA INC., Toronto symbols TPX.A $45.24 and TPX.B $41.10, is buying StarBev L.P., which owns nine breweries in central and eastern Europe. StarBev brews over 20 local beers, as well as major international brands, such as Stella Artois, Beck’s and Lowenbrau, under license. Molson Coors aims to close the deal by June 30, 2012....
PLEASE NOTE: Our next Hotline will go out on Thursday, April 5, 2012. RESEARCH IN MOTION LTD., $14.63, Toronto symbol RIM, earned $418 million, or $0.80 a share, in its fiscal 2012 fourth quarter, which ended March 3, 2012 (all amounts except share price in U.S. dollars). These figures exclude a $346-million (after-tax) writedown of goodwill and a $197-million writedown of inventory of unsold BlackBerry smartphones. On this basis, RIM’s latest earnings fell short of the consensus estimate of $0.81 a share. The latest earnings are also down 55.2% from $934 million, or $1.78 a share, a year earlier....