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., $40.74, Toronto symbol BCE, is teaming up with Rogers Communications Inc. (Toronto symbol RCI.B) to buy 75% of Maple Leaf Sports and Entertainment (MLSE). This is the private company that owns several professional sports teams, including the Toronto Maple Leafs (hockey), Toronto Raptors (basketball) and Toronto FC (soccer). MLSE also owns the Air Canada Centre arena in downtown Toronto, as well as specialty TV channels such as Leafs TV. BCE, in combination with the trust fund that manages its employees’ pension plan, will pay a total of $533 million for 37.5% of MLSE. Rogers will also acquire 37.5%. A private investor will own the remaining 25%. The deal should close in mid-2012. Unlike most sports teams, MLSE is profitable. This investment will also guarantee BCE access to live games and other high-demand content for its TV channels, radio stations and web sites....
We’ve long held a high opinion of Canadian Utilities, because the company’s regulated power plants and natural-gas distribution businesses give it steady cash flow. That gives the stock long-term stability and helps it maintain its dividend. You can also profit from Canadian Utilities through ATCO, its parent company. ATCO’s holding-company discount lets you buy Canadian Utilities, and get ATCO’s other businesses for nothing. In addition, ATCO is working to unlock its value by simplifying its complex operating structure. ATCO has risen 61% since we first recommended it in September 2009. Canadian Utilities is up 62% during the same period....
BANK OF NOVA SCOTIA $49 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.1 billion; Market cap: $53.9 billion; Price-to-sales ratio: 2.0; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.scotiabank.com) remains our top pick among Canada’s big five banks. That’s mainly because it continues to expand in fast-growing regions like Latin America, South America and Asia. Its international banking division accounts for 26% of its earnings. In the year ended October 31, 2011, the bank earned $5.3 billion. That’s up 21.4% from $4.3 billion in 2010. Earnings per share rose 18.2%, to $4.62 from $3.91, on more shares outstanding. Revenue rose 11.5%, to a record $17.3 billion from $15.5 billion. Strong gains at its international and wealth-management operations offset slower growth at its Canadian banking and securities-trading divisions. Earnings in 2012 should rise to $4.82 a share. The stock trades at just 10.2 times that figure. The $2.08 dividend yields 4.2%. The bank paid out 44% of its earnings as dividends in fiscal 2011, which was within its target of 40% to 50%. That gives it room to raise the dividend in fiscal 2012....
sensitive to swings in the economy than, say, utilities. The best manufacturing stocks (including the four we analyze below) are well-established market leaders that can take advantage of downturns to expand. Their unique products and services are also helping them hang on to customers. SNC-LAVALIN GROUP INC. $50 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 150.8 million; Market cap: $7.5 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.7%; 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. SNC recently bought the 23.08% of AltaLink L.P. that it did not already own. The company now owns 100% of AltaLink, which provides electricity to 85% of Alberta’s population through 12,000 kilometres of power lines and 270 substations....
SAPUTO INC. $39 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 200.6 million; Market cap: $7.8 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.9%; TSINetwork Rating: Average; www.saputo.com) earned $127.1 million in its 2012 second quarter, which ended September 30, 2011. That’s up 1.0% from $125.8 million a year earlier. Earnings per share rose 1.7%, to $0.61 from $0.60, on fewer shares outstanding. Sales rose 15.5%, to $1.8 billion from $1.55 billion. That mainly reflects the contribution of DCI Cheese Co. Inc., which Saputo bought for $270.5 million in March 2011. DCI distributes specialty cheeses in the U.S. However, Saputo’s Canadian sales volumes are falling. As well, new regulations will force the company to use more full-fat milk in its Canadian cheese products instead of milk solids. That will increase its costs. Saputo is a hold.
MOLSON COORS CANADA INC. (Toronto symbols TPX.A $41 and TPX.B $42; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 181.1 million; Market cap: $7.4 billion; Price-to-sales ratio: 2.1; Dividend yield: 3.1%; TSINetwork Rating: Average; www.molsoncoors.com) reports that its sales rose 9.1% in the three months ended September 24, 2011, to $954.4 million from $875.0 million a year earlier (all amounts except share prices and market cap in U.S. dollars). That’s mainly due to favourable foreign currency rates and higher beer sales overseas. However, higher ingredient prices and lower sales in North America and the U.K. cut earnings by 11.2%, to $212.4 million, or $1.14 a share, from $239.1 million, or $1.28 a share. The company continues to cut its costs as a result of MillerCoors, its joint venture in the U.S. with rival brewer SABMiller. Combined with savings from its own plan, Molson Coors cut its expenses by $29 million in the latest quarter....
PRECISION DRILLING CORP. $11 (Toronto symbol PD; Aggressive Growth Portfolio, Resource sector; Shares outstanding: 276.1 million; Market cap: $3.0 billion; Price-to-sales ratio: 1.7; No dividends paid since February 2009; TSINetwork Rating: Extra Risk; www.precisiondrilling.com) provides contract-drilling services to land-based oil and gas producers in Canada, the U.S. and Mexico. The company continues to see strong demand for its Super Series horizontal-drilling rigs. Horizontal drilling involves drilling development wells sideways or at an angle to reach isolated pockets of oil or gas. Horizontal drilling works well in situations where conventional drilling is either impossible or too expensive. Precision is now building 49 Super Series rigs, up from its earlier plan to build 30. It will also decommission 49 of its older rigs. Retiring the older rigs will cost Precision between $100 million and $120 million....
Farmers are using more fertilizers to boost their yields and take advantage of high prices for wheat, corn and other crops. At the same time, low fertilizer inventories are pushing up prices and spurring big earnings gains at Potash Corp. and Agrium. However, Agrium offers less risk. POTASH CORP. OF SASKATCHEWAN $44 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 856.5 million; Market cap: $37.7 billion; Price-to-sales ratio: 4.2; Dividend yield: 0.6%; TSINetwork Rating: Average; www.potashcorp.com) is a leading producer of potash, phosphate and nitrogen for use in fertilizers. Most of the company’s mines are in Saskatchewan, which has the world’s largest potash deposits. The company sold 2.2 million tonnes of potash in the three months ended September 30, 2011. That’s up 13.7% from 1.9 million tonnes a year earlier. The average potash price rose 47.4%, to $451 a tonne from $306 (all amounts expect share price and market cap in U.S. dollars)....
RIOCAN REAL ESTATE INVESTMENT TRUST $25 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 263.4 million; Market cap: $6.6 billion; Price-to-sales ratio: 5.0; Dividend yield: 5.5%; TSINetwork Rating: Average; www.riocan.com) has purchased 80% of the Alamo Ranch shopping mall in San Antonio, Texas. Inland Western Retail REIT owns the remaining 20%. This is RioCan’s first acquisition in San Antonio. The mall is 88% occupied, and has well-known anchor tenants, such as Target. These factors cut the risk of expanding into unfamiliar markets. RioCan is a buy.
METRO INC. $53 (Toronto symbol MRU.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 100.7 million; Market cap: $5.3 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.5%; TSINetwork Rating: Average; www.metro.ca) plans to simplify its share structure. Right now, the supermarket operator has two classes of shares: 100.1 million class A subordinate-voting shares (one vote per share) and 577,440 class B multiplevoting shares (16 votes per share). Metro plans to convert the class B shares into class A shares on a one-for-one basis. After that, it will convert the class A shares into a single class of common shares. Metro aims to complete this changeover in early 2012, following shareholder approval. Some pension plans and other institutions avoid companies with two share classes, so this move should make Metro more appealing to these investors. Metro is a buy....