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
CANADIAN TIRE CORP. $62 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.4 million; Market cap: $5.0 billion; Price-to-sales ratio: 0.6; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.canadiantire.ca) is in better shape than Loblaw to compete with big U.S. retailers like Wal-Mart and Target. That’s largely because its unique mix of automotive, household and sporting goods has made it Canada’s best-known retailer. The company gets 55% of its earnings and 60% of its revenue from its 482 stores across Canada. It owns 70% of these stores, but franchisees operate all of them. The company’s 272 gas stations also encourage repeat visits. Moreover, newer retail chains like its 378 Mark’s Work Wearhouse casual-clothing stores and 87 PartSource auto-parts stores are helping Canadian Tire attract more customers....
CAE INC. $13 (www.cae.com) has formed a 50/50 joint venture with Lider Aviacao, Brazil’s largest helicopter operator. Starting in 2012, this new business will use CAE’s simulators to train Brazilian helicopter pilots. Meanwhile, CAE earned $40.7 million in its 2011 third quarter, which ended December 31, 2010. That’s up 8.0% from $37.7 million a year earlier. Earnings per share rose 6.7%, to $0.16 from $0.15, on more shares outstanding. Revenue rose 7.4%, to $411.3 million from $382.9 million. Revenue from CAE’s civilian division rose 9%, as a 21% rise in revenue from pilot-training services offset a 9% drop in flight-simulator sales. Revenue from military customers rose 6%. Best Buy. IGM FINANCIAL INC. $48 (www.igmfinancial.com) continues to benefit from rising stock markets, which have pushed up demand for its mutual funds. As well, the company’s fee income has risen along with the value of the investments it manages. In 2010, it earned $2.79 a share before writedowns and other one-time items, up 18.7% from $2.35 in 2009. Best Buy. BANK OF NOVA SCOTIA $59 (www.scotiabank.com) has raised its quarterly dividend by 5.1%, to $0.52 a share from $0.49. The new annual rate of $2.08 yields 3.5%. Best Buy.
TORONTO-DOMINION BANK, $83.60, Toronto symbol TD, is the first of Canada’s big five banks to raise its dividend following the 2008-2009 financial crisis. The new quarterly dividend of $0.66 a share, up 8.2% from $0.61, yields 3.2% on an annualized basis. TD also reported better-than-expected quarterly earnings this week. In the three months ended January 31, 2011, the bank’s earnings rose 11.0%, to $1.6 billion from $1.4 billion a year earlier. Earnings per share rose 8.8%, to $1.74 from $1.60, on more shares outstanding. These figures exclude several one-time items, such as gains and losses on securities the bank holds, and costs to integrate recent acquisitions in the U.S. On that basis, the latest earnings easily beat the consensus earnings estimate of $1.54 a share. More of the bank’s customers are repaying their loans on time. As a result, TD’s loan-loss provisions fell 19.9%, to $414 million from $517 million. That was the main reason for the higher earnings....
CANADIAN IMPERIAL BANK OF COMMERCE, $82.25, Toronto symbol CM, reported sharply higher earnings this week. In its 2011 first quarter, which ended January 31, 2011, the bank’s earnings rose 22.5%, to $799 million, or $1.92 a share. A year earlier, it earned $652 million, or $1.58 a share. If you exclude unusual items, such as writedowns of securities the bank holds and a gain on the sale of a business, earnings per share would have risen 19.6%, to $1.95 from $1.63. On this basis, the latest earnings beat the consensus estimate of $1.77 a share. Revenue rose 1.3%, to $3.10 billion from $3.06 billion....
TRANSCANADA CORP., $38.01, Toronto symbol TRP, recently opened the second phase of its four-phase Keystone pipeline project, which pumps crude oil from the Alberta oil sands to refineries in the U.S. Midwest. The third phase, called Keystone XL, will pump oil from Oklahoma to the U.S. Gulf Coast. The fourth phase will run from Alberta to Nebraska. Regulatory delays and higher-than-expected construction costs have pushed up the entire project’s cost to $13 billion U.S. That’s 8.3% higher than TransCanada’s earlier estimate of $12 billion U.S. So far, the company has spent $7.4 billion U.S. on Keystone. It aims to complete the remaining two phases by mid-2013....
BCE INC., $35.90, Toronto symbol BCE, continues to profit from recent upgrades to its wireless and high-speed Internet networks. As a result, BCE’s earnings rose 11.9% in 2010, to $2.2 billion from $1.9 billion in 2009. The company spent $500 million on share buybacks in 2010. Because of fewer shares outstanding, earnings per share rose 13.6%, to $2.84 from $2.50. These figures exclude costs related to a restructuring plan, which included cutting jobs, relocating employees and selling excess real estate. The latest earnings also beat the consensus estimate of $2.83 a share. Revenue rose 1.9% in 2010, to $18.1 billion from $17.7 billion. Wireline revenue (which accounts for 57% of BCE’s total revenue) rose just 0.3%. New high-speed Internet and satellite-TV subscribers offset lower local and long-distance telephone revenue. At the end of 2010, the company had 2.1 million high-speed Internet subscribers (up 2.0% from a year earlier) and 2.0 million TV subscribers (up 3.7%)....
Prices for oil, copper and other commodities continue to rise as the global economy recovers. That has pushed up the share prices of most resource companies, including the three oil producers we analyze in this issue. Another way to profit from surging commodity prices is by investing in companies that sell equipment and services to the resources industry. Finning is a top example. The stock has nearly doubled from its recent low of $16 in June 2010. Even so, it still trades at a reasonable multiple to earnings. FINNING INTERNATIONAL INC. $29 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 171.2 million; Market cap: $5.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.finning.com) sells, rents and repairs heavy equipment, such as tractors, bulldozers and trucks, made by Caterpillar Inc....
TECK RESOURCES LTD. $58 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 590.6 million; Market cap: $34.3 billion; Price-to-sales ratio: 3.5; Dividend yield: 1.0%; TSINetwork Rating: Average; www.teck.com) sold 23.2 million tonnes of coal in 2010, up 17.2% from 19.8 million tonnes in 2009. Coal prices rose 15.3% in 2010, to $181 U.S. a tonne from $157 U.S. Teck is also seeing stronger demand and rising prices for its other commodities, including copper, zinc and lead. As a result, its earnings rose 61.3% in 2010, to $1.5 billion from $924 million in 2009. Earnings per share rose 51.4%, to $2.62 from $1.73. These figures exclude unusual items, such as gains on asset sales. Revenue rose 21.7% in 2010, to a record $9.3 billion from $7.7 billion. In 2011, Teck will probably sell 24.5 million to 25.5 million tonnes of coal. That’s up around 8% from 2010, but down from its earlier prediction of 26.0 million tonnes....
Canada’s oil sands still face strong opposition from environmentalists. However, new technology has sharply lowered the oil sands’ greenhouse-gas emissions. As well, turmoil in Egypt and other Middle Eastern countries highlights the oil sands’ strategic importance to the U.S. and Canada. These factors make it less likely that Ottawa will introduce regulations that would slow oil-sands development. These three oil-sands producers have all moved up lately, but they still have plenty of room to grow. SUNCOR ENERGY INC. $40 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.6 billion; Market cap: $64.0 billion; Price-to-sales ratio: 1.7; Dividend yield: 1.0%; TSINetwork Rating: Average; www.suncor.com) became Canada’s largest oil company when it merged with Petro-Canada in August 2009. About 50% of Suncor’s production is conventional oil and natural gas. The remaining 50% comes from oil sands, including the company’s 12% stake in the massive Syncrude development. Suncor aims to expand its oil-sands operations until they account for about 70% of its production....
SAPUTO INC. $40 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 204.6 million; Market cap: $8.2 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.6%; TSINetwork Rating: Average; www.saputo.com) earned $0.54 a share in its third quarter, which ended December 31, 2010. That’s up 8.0% from $0.50 a year earlier. Revenue rose 3.0%, to $1.54 billion from $1.48 billion. The improved results were mainly due to higher cheese sales and prices in the U.S. As well, the company raised its selling price for milk in Argentina. However, a third of Saputo’s revenue comes from outside Canada. The Canadian dollar’s strength against the U.S. dollar and the Argentinian peso hurt the contribution of Saputo’s international sales. Saputo is a buy.