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
PLEASE NOTE: Our next Hotline will go out on Thursday, April 21, 2011. ARBOR MEMORIAL SERVICES INC., $25.00, Toronto symbol ABO.A, owns 85 funeral homes, 41 cemeteries, 26 crematoria, seven reception centres for memorial services. The company operates in eight provinces. The stock has gained nearly 70% since it fell to $15 in June 2009. That’s partly because Arbor is a thin trader, so it only takes a few trades to move the share price. That makes the stock highly volatile, and adds to its risk....
Bombardier was a favourite of momentum traders in the 1990s, and the stock peaked at over $26 in 2000. However, 9/11 and two recessions cut the company’s share price to under $3 in 2009. In response, Bombardier aggressively cut its costs. It also expanded its railcar business. That lowered its exposure to the highly cyclical aircraft industry. These moves have significantly improved Bombardier’s earnings. That’s also helping the company develop new, more fuel-efficient airplanes and high-speed trains. These new products will help Bombardier increase its sales and market share, particularly in fast-growing countries like China and Brazil. BOMBARDIER INC. (Toronto symbols BBD.A $6.90 and...
CAE INC. $12 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 256.8 million; Market cap: $3.1 billion; Price-to-sales ratio: 2.1; Dividend yield: 1.3%; TSINetwork Rating: Average; www.cae.com) was, like Bombardier (see left), a one-time favourite of momentum traders. But it fell out of the broker/media limelight after airlines cut their flight-simulator orders in the wake of 9/11. However, the company continues to benefit from its expansion into pilot training, which it began in 2000. This has cut CAE’s reliance on simulator sales, and given it more predictable revenue streams. CAE now trains over 50,000 pilots each year at its 24 training centres around the world....
These three utilities are using the steady cash flows from their regulated businesses to invest in new projects. That should spur their long-term earnings, and give them more cash to keep raising their dividends. TRANSCANADA CORP. $39 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 699.5 million; Market cap: $27.3 billion; Price-to-sales ratio: 3.4; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.transcanada.com) operates a 60,000-kilometre pipeline network that pumps natural gas from Alberta to eastern Canada and the U.S. TransCanada also owns, or has interests in, over 10,900 megawatts of power generation. That includes Bruce Power LP, a nuclear facility in Ontario, and the Ravenswood facility, which serves New York City. TransCanada has spent about $10 billion of the $20 billion it has set aside for new growth projects. It will spend the remaining $10 billion over the next two years. Its biggest project is the Keystone pipeline, which it is building in three phases....
FORTIS INC. $32 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 174.4 million; Market cap: $5.6 billion; Price-to-sales ratio: 1.5; Dividend yield: 3.6%; TSINetwork Rating: Above Average; www.fortis.ca) continues to benefit from its 2007 purchase of Terasen Inc., which distributes natural gas to 939,600 customers in B.C. Terasen’s profits rose 11.1% in 2010, and provided 46% of Fortis’s record earnings of $285.0 million, or $1.65 a share. That’s up 8.8% from $262.0 million, or $1.54 a share, in 2009. The stock now trades at 18.4 times the $1.74 a share that Fortis will probably earn in 2011. That’s a high p/e ratio for a utility that gets 93% of its revenue from slow-growing regulated businesses....
SHAWCOR LTD. $35 (Toronto symbol SCL.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 70.6 million; Market cap: $2.5 billion; Price-to-sales ratio: 2.4; Dividend yield: 0.9%; TSINetwork Rating: Average; www.shawcor.com) is buying the pipeline-coating operations of privately held Altus Energy Services. The company did not reveal the price. This Nisku, Alberta-based business coats the inside and outside of pipelines to prevent rust. The company specializes in coating bends, fittings and elbows. The Altus operations will let ShawCor sell a wider range of coating services to western Canadian natural-gas and oil pipeline operators. ShawCor is a buy.
Torstar and Transcontinental should continue to benefit from rising advertising revenue as the economy improves. As well, both companies have bought new, efficient presses that have lowered their operating costs. Moreover, both are cheap in relation to their earnings. TORSTAR CORP. $15 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.1 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.5%; TSINetwork Rating: Above Average; www.torstar.com) publishes The Toronto Star, which is Canada’s largest daily newspaper by circulation. The company also publishes three other daily newspapers and over 100 weeklies, mainly in southern Ontario. Newspapers account for about 70% of Torstar’s revenue, and 60% of its earnings. The company’s other main business is wholly owned Harlequin Enterprises Ltd., the world’s leading publisher of romance novels....
FINNING INTERNATIONAL INC. $28 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 171.4 million; Market cap: $4.8 billion; Price-to-sales ratio: 1.0; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.finning.com) will supply mining equipment and services to Thompson Creek Metals Company Inc. (Toronto symbol TCM) for its Mt. Milligan gold/copper mine in B.C. The company will begin fulfilling this contract in 2012. It did not reveal the value of this contract, but it could lead to more deals, as the mine’s reserves should last 22 years. Finning is a buy.
These companies on this page offer investors a way to diversify their Finance sector holdings beyond the big five banks. However, they are only for investors who can tolerate the added risk. DUNDEE CORP. $25 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 70.7 million; Market cap: $1.8 billion; Price-to-sales ratio: 2.3; No dividends paid; TSINetwork Rating: Average; www.dundeecorp.com) is a holding company that invests in publicly listed and private companies in three main areas: wealth management, real estate and resources. The company recently sold its 48% stake (60% voting interest) in DundeeWealth Inc. to Bank of Nova Scotia (Toronto symbol BNS). DundeeWealth owns the Dynamic family of mutual funds....
HOME CAPITAL GROUP INC. $58 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.6 million; Market cap; $2.0 billion; Price-to-sales ratio: 3.8; Dividend yield: 1.2%; TSINetwork Rating: Average; www.homecapital.com) offers mortgages to borrowers who don’t meet the stricter criteria of larger, traditional lenders. Home Capital continues to do a good job of identifying problem loans early, which makes it easier to adjust repayment terms. That’s why bad loans fell to 0.58% of its total loans in 2010 from 0.85% in 2009. The stock has gained 2,800.0% since we first recommended it in the July 1998 issue of Stock Pickers Digest, our newsletter that focuses on aggressive investments (we moved Home Capital to The Successful Investor in December 2007). Even so, we feel it still has lots of growth ahead. Home Capital Group is a buy.