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
PENGROWTH ENERGY CORP., $9.78, Toronto symbol PGF, is buying rival oil producer NAL Energy Corp. (Toronto symbol NAE) in an all-stock transaction. Under the terms of the deal, NAL investors will receive 0.86 of a Pengrowth common share for each share they hold. That will give them 26% of the combined company. The plan needs shareholder and other approvals, but Pengrowth and NAL aim to complete the merger by May 31, 2012. Adding NAL’s properties in Alberta and B.C. (54% natural gas and 46% oil) will increase Pengrowth’s projected 2012 production to between 86,000 and 89,000 barrels of oil equivalent a day, from its earlier range of 74,500 to 76,500 barrels....
BCE INC. $39.64, Toronto symbol BCE, is buying Astral Media Inc. (Toronto symbols ACM.A and ACM.B). Montreal-based Astral owns 22 TV stations, 84 radio stations and several pay TV and specialty channels, such as The Movie Network, Family Channel and Teletoon. It also owns billboards and sells other outdoor advertising services in Quebec, Ontario and B.C. The purchase price is $3.4 billion, including $380 million of Astral’s debt. BCE will pay roughly 75% of this cost in cash and 25% in common shares. To put this purchase in context, BCE earned $2.4 billion, or $3.13 a share, in 2011....
CANADIAN PACIFIC RAILWAY LTD., $75.25, Toronto symbol CP, continues to expand its rail network in the Bakken area, which could contain more than 500 billion barrels of oil. This region covers parts of Montana, North Dakota and Saskatchewan. Oil was first discovered at Bakken in 1951, but it has always been hard to extract from the shale rock. However, modern techniques, such as horizontal (or slant) drilling, have made this oil much easier to access. Texas-based U.S. Development Group LLC is currently building a new hub in North Dakota to handle Bakken’s rising production. This hub, which should begin operating in mid-2012, will transfer oil from trucks to trains, which will then ship it to market....
The arrival of new wireless providers has put pressure on Canada’s three main telecommunications companies (BCE, Telus and Rogers). To remain competitive, all three are offering subscribers better long-term deals. They are also making big investments in new wireless and high-speed Internet technologies. However, these moves are also dampening their profits. Still, demand for wireless services continues to rise, and we feel BCE’s broad geographic reach puts it in the best position to profit from that trend. The improving economy should also push up ad sales at its TV stations and other media businesses. Moreover, the company recently went through a significant restructuring. That will increase its long-term profits and give it more cash for dividends....
SNC-LAVALIN GROUP INC. $39 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 150.9 million; Market cap: $5.9 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.2%; TSINetwork Rating: Average; www.snclavalin.com) fell over 20% on February 28, 2012 after it announced that its 2011 earnings will be $80 million, or 18% below its earlier forecast. In 2010, SNC earned $437.0 million, or $2.87 a share. The earnings drop is partly due to $35 million in unusual payments related to certain construction contracts. Because of the recent civil war, SNC will also write down the value of its Libyan operations, including a prison, an airport and a water treatment system, by $23 million. The company did not say if the unusual payments are connected to its Libyan projects. SNC is working with its external auditors and lawyers to examine these payments and certain other contracts....
While BCE remains our favourite telco, we still have a high opinion of these three. Each faces unique challenges, and their concentration in certain regions adds risk. However, ongoing investments in their networks will continue to help them hang on to customers in the face of strong competition from cable companies and Internet-based phone services. That will also let them maintain or increase their dividends. TELUS CORP. (Toronto symbols T $57 and T.A $57; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 325.0 million; Market cap: $18.5 billion; Price-to-sales ratio: 1.8; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.telus.com) gets most of its growth from wireless services. Its 7.3 million subscribers across Canada now supply 52% of its earnings....
BOMBARDIER INC. (Toronto symbols BBD.A $4.13 and BBD.B $4.08; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $7.0 billion; Price-to-sales ratio: 0.3; Dividend yield: 2.4%; TSINetwork Rating: Average; www.bombardier.com) earned $837 million, or $0.47 a share, in the year ended December 31, 2011 (all amounts except share price and market cap in U.S. dollars). It earned $762 million, or $0.42 a share, in the 12 months ended January 31, 2011 (the company has changed its fiscal year end to December 31). Revenue was $18.3 billion compared with $17.9 billion. Sales of passenger railcars supplies 53% of Bombardier’s total revenue. This business has a backlog of $31.9 billion. The company gets the remaining 47% of its revenue from its aerospace division. This division has an order backlog of $22.0 billion. Bombardier is a buy. The subordinate-voting class B shares are the better choice, due to their greater liquidity and slightly higher dividend yield.
ENBRIDGE INC. $38 (Toronto symbol ENB; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 782.3 million; Market cap: $29.7 billion; Price-to-sales ratio: 1.5; Dividend yield: 3.0%; TSINetwork Rating: Above Average; www.enbridge.com) plans to build a new pipeline that would pump shale oil from the Bakken region of North Dakota to refineries in the U.S. and Canada. If it can sign up enough oil shippers, this new line would increase Enbridge’s capacity in the region by 67,000 barrels a day by the end of 2013. Right now, the company’s North Dakota pipelines can pump 210,000 barrels a day. The new line would cost $650 million, which is equal to 59% of the $1.1 billion, or $1.48 a share, that Enbridge earned in 2011. However, investments like this will help it take advantage of rising oil production in North Dakota, which has quadrupled since 2005. Enbridge is a buy.
TIM HORTONS INC. $53 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 157.4 million; Market cap: $8.3 billion; Price-to-sales ratio: 3.0; Dividend yield: 1.6%; TSINetwork Rating: Average; www.timhortons.com) operates 3,295 coffee-and-donut stores in Canada and 714 in the U.S. It also has five recently-opened outlets in the Persian Gulf. The company’s new menu items, such as espresso-based coffee drinks, continue to be extremely popular. Warmer-than-usual winter weather has also spurred customer traffic. These two factors pushed up Tim Hortons’ sales by 12.5% in 2011, to $2.9 billion from $2.5 billion in 2010. If you exclude the positive impact of foreign currency rates, sales rose 7.4% in 2011. Same-store sales rose 6.3% at its U.S. outlets, and 4.0% in Canada....
The long-term outlook for these two fertilizer producers is bright as population growth prompts farmers to plant more crops. However, we prefer Agrium for new buying, as its retail operations help cushion it from volatile fertilizer prices. POTASH CORP. OF SASKATCHEWAN $43 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 858.7 million; Market cap: $36.9 billion; Price-to-sales ratio: 4.0; Dividend yield: 1.3%; TSINetwork Rating: Average; www.potashcorp.com) is the world’s largest fertilizer producer. It has six potash mines in Saskatchewan and one in New Brunswick. Thanks to a 30.4% rise in potash prices, the company’s earnings rose 73.6% in 2011 to $3.1 billion from $1.8 billion in 2010 (all amounts except share price and market cap in U.S. dollars). Earnings per share rose 80.0%, to $3.51 from $1.95, on fewer shares outstanding. Revenue gained 33.3%, to $8.7 billion from $6.5 billion....