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
IGM FINANCIAL INC. $49 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 259.7 million; Market cap: $12.7 billion; Price-to-sales ratio: 4.8; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.igmfinancial.com) had $134.1 billion of assets under management on March 31, 2011. That’s up 8.7% from $123.4 billion a year earlier. The rebounding stock market was the main reason for the gain. IGM’s fee income varies with the value of the mutual funds and other securities it manages, so the company’s revenue and earnings gain when the value of these assets rises. IGM Financial is a buy....
GREAT-WEST LIFECO INC. $27 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 948.5 million; Market cap: $25.6 billion; Price-to-sales ratio: 0.8; Dividend yield: 4.6%; TSINetwork Rating: Above Average; www.greatwestlifeco.com) gets most of its revenue from selling life insurance and wealth-management services to individuals. It also sells catastrophe insurance to other property and casualty insurance companies. The company estimates that claims stemming from the recent earthquake and tsunami in Japan will cut its earnings by $75 million in the three months ended March 31, 2011. To put that in context, Great-West earned $1.9 billion, or $1.96 a share, in 2010. Great-West Lifeco is a buy.
ENCANA CORP. $32 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 736.3 million; Market cap: $23.6 billion; Price-to-sales ratio: 2.5; Dividend yield: 2.4%; TSINetwork Rating: Average; www.encana.com) is one of North America’s largest natural-gas producers. The company prefers to focus on large unconventional reserves, including shale gas, which is natural gas that is trapped in rock formations. To extract it, companies must pump water and chemicals into the rock. This fractures the rock and releases the natural gas. At current production rates, Encana’s proven reserves should last 12 years.
Encana has lagged behind Cenovus
Encana took its current form when the old EnCana Corp. split itself into two separate companies in December 2009. Since then, the new Encana has gained just 8%. The other company, Cenovus Energy Inc. (Toronto symbol CVE), which focuses on oil-sands projects, has jumped 38%....
RESEARCH IN MOTION INC. $53 (www.rim.com) has agreed to license over 30,000 patents from Intellectual Ventures, a privately held U.S. company. RIM did not say how much it is paying, but the deal will help protect it from patent-infringement lawsuits. These patents should also help RIM add new features to its BlackBerry smartphones, or develop new products, such as its upcoming PlayBook tablet computer. Buy. SNC-LAVALIN GROUP INC. $54 (www.snclavalin.com) has won a contract to build a new airport terminal on Mayotte, a French-controlled island northwest of Madagascar. SNC will also operate the terminal under a 15-year concession agreement. The $62-million deal is small next to SNC’s annual revenue of $6.3 billion, but it enhances the company’s reputation and could lead to more contracts in this region. Best Buy. POTASH CORP. OF SASKATCHEWAN $54 (www.potashcorp.com) will probably ship 9.5 million to 10 million tonnes of potash in 2011. That would beat its 2007 record of 9.4 million tonnes. Rising prices for corn and other crops are prompting farmers to apply more fertilizers. However, potash prices remain volatile, and the stock could suffer a setback if prices move down. Hold.
PLEASE NOTE: Our next Hotline will go out on Friday, April 15, 2011. TECK RESOURCES LTD., $55.06, Toronto symbol TCK.B, rose 8% this week after the company reached a new deal with the union at its Elkview metallurgical coal mine in B.C. The deal should end a two-month strike. Elkview is the second-largest of Teck’s six coal mines in B.C., so settling this dispute will help the company take advantage of rising demand for its coal by steelmakers in Asia. As well, the company continues to benefit from higher copper prices. It should also see higher demand for its coal and zinc as Japan rebuilds following last month’s earthquake and tsunami....
PLEASE NOTE: Our next Hotline will go out on Thursday, April 7, 2011. BOMBARDIER INC., Toronto symbols BBD.A $7.09 and BBD.B $7.11, rose 12% this week after the company reported better-than-expected earnings. In its 2011 fiscal year, which ended January 31, 2011, Bombardier’s earnings rose 8.2%, to $755 million from $698 million in fiscal 2010 (all amounts except share price in U.S. dollars). Earnings per share rose 7.7%, to $0.42 from $0.39, on more shares outstanding. That easily beat the consensus estimate of $0.36 a share....
RESEARCH IN MOTION INC., $55.78, Toronto symbol RIM, reported better-than-expected earnings this week. However, the stock fell 11%. That’s because the company’s sales forecast for the current quarter fell short of the consensus estimate. In its 2011 fiscal year, which ended February 26, 2011, RIM’s earnings rose 38.8% to $3.4 billion from $2.5 billion in fiscal 2010 (all amounts except share price in U.S. dollars). Earnings per share rose 47.1%, to $6.34 from $4.31, on fewer shares outstanding. That beat the consensus estimate of $6.29 a share. The company shipped a record 52.3 million BlackBerry smartphones in fiscal 2011, up 43% from the prior year. That’s why revenue rose 33.1%, to $19.9 billion from $15.0 billion....
The stock market put on a huge rise from mid-2010 through February this year, and this left it ripe for a setback. Japan’s earthquake/tsunami/nuclear plant breakdown provided the trigger for that setback. Events in Japan have been horrific for the victims, of course. The Japanese situation could still weigh on the market for weeks or months to come. However, the damage to Japan is far too isolated and local to put the worldwide economic recovery at risk. World economic growth could slow temporarily while multi-national companies re-think their hiring and investment plans, and consumers re-think major purchases. After they complete their re-thinking, businesses and consumers may speed up their spending to make up for lost time. The outcome of Japan’s nuclear problems could have a big impact. If radiation leakage is widespread, it could spur much more environmental opposition to the nuclear industry. That could shift demand from nuclear to natural-gas power plants, particularly since shale gas discoveries and technology have vastly expanded natural gas reserves in North America and around the world. (One key beneficiary would be our long-time favourite, Encana – see below.)...
BANK OF NOVA SCOTIA, $57.66, Toronto symbol BNS, reported record earnings this week. That prompted the bank to raise its dividend. In its 2011 first quarter, which ended January 31, 2011, Bank of Nova Scotia earned a record $1.2 billion. That’s up 18.8% from $988 million a year earlier. Earnings per share rose 17.6%, to $1.07 from $0.91, on more shares outstanding. That beat the consensus earnings estimate of $1.06 a share. Revenue rose 5.6%, to $4.1 billion from $3.9 billion. The bank continues to set aside less money to cover bad loans because of the improving economy; that was the main reason for the higher earnings. In the latest quarter, loan-loss provisions fell 27.5%, to $269 million from $371 million a year earlier....