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.
[text_ad]
Read More
Close
Dividend Stocks Library Archive
INDIGO BOOKS & MUSIC INC. $15 (Toronto symbol IDG; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 24.7 million; Market cap: $370.5 million; Price-to-sales ratio: 0.4; Dividend yield: 2.9%; TSINetwork Rating: Average; www.chapters.indigo.ca) is now selling its Kobo e-book reader through Future Shop and Best Buy stores across Canada. Selling the Kobo through other retailers should spur greater demand for Indigo’s e-book downloads. However, the device faces rising price competition from other e-book readers, and from Apple’s iPad tablet computer. Indigo is a hold.
These two former income trusts recently converted to corporations in response to Ottawa’s tax on income-trust distributions. That means they must now pay corporate taxes. Even so, their high payouts (which are now dividends) seem secure. 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) is the new name of Pengrowth Energy Trust. It produces oil and natural gas from properties in Alberta, B.C. and Saskatchewan. Pengrowth also holds interests in other energy projects, such as its 8.4% stake in the Sable Offshore Energy Project, which operates three offshore-drilling platforms south of Nova Scotia. Roughly 60% of the company’s production is natural gas. The remaining 40% is oil. Low gas prices have hurt Pengrowth’s earnings and held back its cash flow. However, it has locked in prices for 23% of its 2011 daily production at $5.72 per thousand cubic feet. That’s higher than today’s price of $4.30. Pengrowth focuses on proven properties with large reserves and predictable production. That helps cut its risk....
FORTIS INC. $34 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 173.6 million; Market cap: $5.9 billion; Price-to-sales ratio: 1.6; Dividend yield: 3.4%; TSINetwork Rating: Above Average; www.fortisinc.com) has formed a joint venture with a company controlled by Native bands in Ontario. Fortis will own 51% of this new company, which will build and operate power-transmission projects. Teaming up with these Native groups gives Fortis exclusive access to certain areas near Lake Huron. That should give it an edge over competing power-transmission proposals. Fortis is a buy.
Nordion and Gennum both face challenges that could hold back their short-term growth. However, both are leaders in their niche markets. That enhances their long-term prospects. NORDION INC. $11 (Toronto symbol NDN; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 67.2 million; Market cap: $739.2 million; Price-to-sales ratio: 4.1; Dividend yield: 3.6%; TSINetwork Rating: Extra Risk; www.nordion.com) supplies medical isotopes for cancer detection and research. It also makes products that sterilize surgical tools and food. Nordion gets most of its isotopes from the aging Chalk River nuclear reactor near Ottawa. Atomic Energy of Canada Ltd., which operates the reactor, had to shut it down in May 2009 to fix a water leak. Atomic Energy restarted the reactor in August 2010. The shutdown cut Nordion’s gross earnings by $4 million a month (all amounts except share price and market cap in U.S. dollars)....
TIM HORTONS INC. $41 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 173.0 million; Market cap: $7.1 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.3%; TSINetwork Rating: Average; www.timhortons.com) will make its first expansion outside North America under a new deal with Dubai-based Apparel Group. Under the terms, Apparel will open up to 120 Tim Hortons coffee-and-donut shops in the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman in the next five years. Apparel will also operate the outlets. Teaming up with well-established local companies like Apparel Group cuts the risk of expanding internationally. Tim Hortons is a buy.
METRO INC. $43 (Toronto symbol MRU.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 105.8 million; Market cap: $4.5 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.8%; TSINetwork Rating: Average; www.metro.ca) has about 600 supermarkets and 250 drugstores in Ontario and Quebec. In the three months ended December 18, 2010, Metro’s sales fell 0.5%, to $2.63 billion from $2.65 billion a year earlier. Metro cut its prices due to rising competition from other grocery retailers and Wal-Mart, which continues to expand its grocery offerings. As well, drug prices have fallen due to the expiry of important drug patents and new generic-drug legislation in Ontario. However, earnings rose 3.7%, to $92.0 million from $88.7 million. Earnings per share rose 7.3%, to $0.88 from $0.82, on fewer shares outstanding. These figures exclude one-time items, such as expansion costs and a lower tax bill....
TRANSCANADA CORP. $38 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 690.0 million; Market cap: $26.2 billion; Price-to-sales ratio: 3.2; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.transcanada.com) has received enough commitments from oil shippers to build a new pipeline from Montana and North Dakota to oil-storage facilities in Cushing, Oklahoma. This pipeline will cost $140 million. TransCanada also plans to build a $70-million pipeline from Cushing to refineries on the U.S. Gulf Coast. To put these costs in context, TransCanada earned $374 million, or $0.54 a share, in the three months ended September 30, 2010. If these projects receive regulatory approval, they should begin operating in 2013. These new pipelines will complement TransCanada’s $12-billion U.S. Keystone pipeline project, which recently started pumping oil from Alberta to refineries in the U.S. Midwest....
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) is best known for its BlackBerry smartphones and other wireless devices. There are now over 55 million BlackBerry users in 175 countries. RIM gets 80% of its revenue by selling hardware; services and software supply the remaining 20%.
Advantages outweigh RIM’s risks
RIM is riskier than most of our recommendations. That’s mainly because smartphone technology changes quickly, and the industry is intensely competitive. However, the company has several advantages that help offset these risks....
EMERA INC. $31 (www.emera.com) has raised its stake in Light & Power Holdings to 79.7% from 38.3%. Light & Power is the sole electricity supplier in Barbados. Emera paid roughly $91 million for the extra shares. That’s equal to 60% of the $151.5 million, or $1.31 a share, that Emera earned in the nine months ended September 30, 2010. Investments like this cut Emera’s reliance on Nova Scotia, which accounts for 70% of its revenue. Best Buy. TORONTO-DOMINION BANK $78 (www.td.com) will open 300 of its branches, or one-quarter of the total, on Sundays. Longer operating hours should help it attract more customers. Buy. TRANSALTA CORP. $21 (www.transalta.com) is building more wind farms as new environmental regulations force it to phase out its coal-fired power power plants. However, ballooning budget deficits could prompt governments to cut wind-power subsidies. Sell.
SUNCOR ENERGY INC., $40.61, Toronto symbol SU, reported better-than-expected earnings this week. As well, the turmoil in Egypt has pushed up oil prices, and helped lift Suncor’s share price. In 2010, Suncor’s earnings jumped 113.4%, to $2.7 billion from $1.3 billion in 2009. Earnings per share rose 64.6%, to $1.74 from $1.06, on more shares outstanding. These figures exclude several unusual items, including gains on sales of assets Suncor received as a part of its 2009 takeover of Petro-Canada. On this basis, the 2010 earnings easily beat the consensus estimate of $1.57 a share. Cash flow per share rose 82.1% in 2010, to $4.26 from $2.34. Revenue gained 38.2%, to $34.4 billion from $24.8 billion....