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
Stocks in the Utilities sector usually appeal mainly to conservative and income-seeking investors. That’s because these firms’ operations (such as power plants and pipelines) generate steady cash flows that help them pay above-average dividends. However, some utilities also offer opportunities for growth. Emera is good example. In the past few years, the company has aggressively expanded outside its home province of Nova Scotia. These investments should pay off for years to come. EMERA INC. $31 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 114.7 million; Market cap: $3.6 billion; Price-to-sales ratio: 1.3; Dividend yield: 4.2%; TSINetwork Rating: Average; www.emera.com) gets 75% of its revenue and 65% of its earnings from Nova Scotia Power Inc., which is Nova Scotia’s main electricity supplier....
PENGROWTH ENERGY CORP. $12 (Toronto symbol PGF; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 326.0 million; Market cap: $3.9 billion; Price-to-sales ratio: 2.4; Dividend yield: 7.0%; TSINetwork Rating: Average; www.pengrowth.com) produces oil and natural gas from properties in Alberta, B.C. and Saskatchewan. Natural gas accounted for 62% of Pengrowth’s production in 2010. Oil provided the remaining 38%. In 2010, Pengrowth’s cash flow rose 9.9%, to $606.0 million from $551.4 million in 2009. However, cash flow per share fell 3.8%, to $2.01 from $2.09, on more shares outstanding. The gain was mainly due to a 6.8% rise in the average price the company received per barrel of oil equivalent (including natural gas). That offset a 6.1% drop in its average daily production after it sold some properties in 2009. Low natural gas prices have held back the stock in the past few weeks, even as oil prices jumped in response to the turmoil in the Middle East....
Canada’s big telephone companies face strong competition from cable companies and new entrants in the wireless market. However, their traditional phone businesses continue to provide strong cash flows. That’s letting them upgrade their networks, and maintain or increase their dividends. BCE INC. $35 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 752.3 million; Market cap: $24.4 billion; Price-to-sales ratio: 1.5; Dividend yield: 5.6%; TSINetwork Rating: Above Average; www.bce.ca) is Canada’s largest provider of telephone, Internet and wireless services. The company’s main subsidiary, Bell Canada, has 6.5 million residential and business customers in Ontario and Quebec. BCE sells wireless services to 7.2 million subscribers across Canada. As well, it has 2.1 million high-speed Internet customers and 2.0 million satellite-TV subscribers....
RESEARCH IN MOTION LTD. $63 (Toronto symbol RIM; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 521.8 million; Market cap: $32.9 billion; Price-to-sales ratio: 1.8; No dividends paid; TSINetwork Rating: Above Average; www.rim.com) should see greater demand for its BlackBerry smartphones as a result of improvements to the speed and geographic reach of wireless networks in Canada. As well, faster wireless connections improve the prospects for RIM’s upcoming PlayBook tablet computer. This device faces strong competition from the Apple iPad, which accounts for about 90% of tablet sales. However, the PlayBook’s ability to share data with BlackBerry phones should give it an advantage. Research in Motion is a buy.
AGRIUM INC. $88 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 158.0 million; Market cap: $13.9 billion; Price-to-sales ratio: 1.4; Dividend yield: 0.1%; TSINetwork Rating: Average; www.agrium.com) earned $731.0 million, or $4.63 a share, in 2010 (all amounts except share price and market cap in U.S. dollars). That’s up 99.7% from $366.0 million, or $2.33 a share, in 2009. Sales rose 15.2%, to $10.5 billion from $9.1 billion. That’s largely because rising crop prices are prompting farmers to buy more fertilizer, seeds and agricultural supplies from Agrium. As well, the company recently completed its $1.2-billion (Australian) purchase of AWB Ltd., which operates over 400 farm-supply stores in Australia and New Zealand. Agrium also assumed $540 million (Australian) of AWB’s debt. That pushed up its total long-term debt to $2.1 billion at the end of 2010. However, that’s still less than two years’ cash flow. Agrium is a buy.
These three companies all have large overseas operations. That exposes them to a wide variety of risks, including volatile currency-exchange rates and political unrest. However, all three are focusing on fast-growing markets. That enhances their long-term prospects. THOMSON REUTERS CORP. $38 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 833.7 million; Market cap: $31.7 billion; Price-to-sales ratio: 2.4; Dividend yield: 3.2%; TSINetwork Rating: Above Average; www.thomsonreuters.com) has two main divisions: Markets (which supplied 58% of its 2010 revenue and 49% of its earnings) sells financial-information products to banks and other financial institutions. Professional (42%, 51%) sells specialized information to professionals in the legal, accounting, scientific and health-care fields. Thomson Reuters took its present form when the Ontario-based Thomson Corp. bought the U.K.-based Reuters news agency for $17 billion U.S. in cash and shares (all amounts except share price and market cap in U.S. dollars) in April 2008....
CANADA BREAD CO. LTD. $47 (Toronto symbol CBY; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 25.4 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.7; Dividend yield: 0.5%; TSINetwork Rating: Above Average; www.canadabread.ca) earned $2.85 a share in 2010, down 10.9% from $3.20 in 2009. The latest earnings exclude the costs of a new bakery in Hamilton, Ontario, which should begin operating in July 2011. Savings from this new plant will help Canada Bread offset rising costs for wheat and other ingredients. Sales fell 6.9%, to $1.6 billion from $1.7 billion, as the high Canadian dollar hurt the contribution of its U.K. and U.S. operations. Canada Bread is still a hold.
SHAWCOR LTD. $37 (Toronto symbol SCL:A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 70.6 million; Market cap: $2.6 billion; Price-to-sales ratio: 2.6; Dividend yield: 0.8%; TSINetwork Rating: Average; www.shawcor.com) saw its revenue fall 12.7% in 2010, to $1.0 billion from $1.2 billion in 2009. That’s partly because it competed a major pipeline-coating job in late 2009. Earnings per share fell 19.9%, to $1.49 from $1.86. The company’s backlog of customer orders that it expects to complete within a year fell 8.7% in 2010, to $374.6 million. However, higher oil prices are spurring new pipeline construction. The company has submitted bids on various contracts worth a total of $1.5 billion. ShawCor is a buy.
LOBLAW COMPANIES LTD. $39 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; 280.6 million; Market cap: $10.9 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.2%; TSINetwork Rating: Above Average; www.loblaw.ca) aims to open 20 stand-alone “Joe Fresh” clothing and accessories stores over the next few years. It already has one store in Vancouver, and plans to open five more outlets in 2011: three in Toronto, one in Calgary and one in New York City. However, the company faces growing competition from non-food retailers like Canadian Tire that have started selling groceries. As well, Wal-Mart plans to open 40 new grocery stores in Canada this year. Rising food costs could also squeeze Loblaw’s profit margins. Loblaw is a hold....
ANDREW PELLER LTD. $8.70 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.9 million; Market cap: $129.6 million; Price-to-sales ratio: 0.5; Dividend yield: 3.8%; TSINetwork Rating: Above Average; www.andrewpeller.com) is Canada’s second-largest wine producer, after Vincor Canada. In the three months ended December 31, 2010, Peller’s sales rose 4.2%, to $75.0 million from $71.9 million a year earlier. The company launched a number of new products, and is seeing rising demand for its high-margin premium brands. These gains were partly offset by higher taxes on wines sold in its Ontario stores and weaker demand for home winemaking kits....