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
ENCANA CORP. $29 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 736.3 million; Market cap: $21.4 billion; Price-to-sales ratio: 2.1; Dividend yield: 2.8%; TSINetwork Rating: Average; www.encana.com) continues to cut its capital spending in response to low natural-gas prices. Gas prices have suffered because new drilling technologies have made it easier to extract gas from shale rock and other unconventional sources. That has increased gas supplies. In 2010, Encana had planned to spend $5 billion to explore and develop its properties (all amounts except share price and market cap in U.S. dollars). However, it later cut that to $4.8 billion. The company will probably spend between $4.0 billion and $4.5 billion in 2011, but it can quickly raise spending and boost production if gas prices improve. Encana is a buy.
ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $61 and ACO.Y [class II voting] $60; Income Portfolio, Utilities sector; Shares outstanding: 58.1 million; Market cap: $3.5 billion; Price-to-sales ratio: 1.1; Dividend yield: 1.7%; TSINetwork Rating: Above Average; www.atco.com) has won a new, three-year contract to provide emergency services to NATO forces at the Kandahar airfield in Afghanistan. These services include rescuing aircrew in the event of a crash or fire and operating ambulances. The company did not reveal the contract’s value. Operating in Afghanistan entails considerable risk. However, ATCO has a long history of building structures and providing support services to NATO and the Canadian military. ATCO is a buy. The cheaper, more liquid class I non-voting shares are the better choice....
EMERA INC. $33 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 114.0 million; Market cap: $3.8 billion; Price-to-sales ratio: 2.4; Dividend yield: 3.9%; TSINetwork Rating: Average; www.emera.com) has completed its purchase of California Pacific Electric Co., which generates and distributes electricity to 47,000 customers in Lake Tahoe, California. Emera bought this business through a 50/50 partnership with Algonquin Power & Utilities Corp. (Toronto symbol AQN), which holds interests in 45 renewable-power facilities in Canada and the northeastern U.S., as well as 14 thermal-energy plants and 19 water-distribution and waste-water facilities. When the partners announced the purchase in April 2009, the price was $116 million U.S. However, the slow pace of regulatory approvals pushed up the final price to $132 million U.S....
SNC-LAVALIN GROUP INC. $60 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.2 million; Market cap: $9.1 billion; Price-to-sales ratio: 1.5; Dividend yield: 1.1%; TSINetwork Rating: Average; www.snclavalin.com) is a leading Canadian engineering and construction company. SNC designs and builds large-scale public-works projects, such as roads, bridges, transit systems and water-treatment plants. It also builds mines, chemical plants and electrical-power systems. The company is working on projects in over 100 countries, but it gets about 55% of its revenue from Canada. Concession projects, such as roads and airports, are a growing part of SNC’s business. (Concessions are rights granted by governments to run public facilities.) Right now, concessions account for about 15% of SNC’s earnings.
407 is an underappreciated asset
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INDIGO BOOKS & MUSIC INC. $15 (www.chapters.indigo.ca) continues to see strong demand for its Kobo e-book downloading service. During the 2010 Christmas shopping season, the company’s e-book sales were 50 times higher than a year earlier. Kobo now has customers in over 130 countries. Hold. TIM HORTONS INC. $43 (www.timhortons.com) recently opened a new online store that ships its coffee, tea, travel mugs and other items to all 50 U.S. states. This will mainly appeal to Canadians living in the U.S., but it does give the company a cheap way to expand its U.S. sales. Best Buy. PENGROWTH ENERGY CORP. $13 (www.pengrowth.com) is the new name for Pengrowth Energy Trust (old symbol PGF.UN) after its conversion to a dividend-paying corporation on January 1, 2011. Pengrowth has large tax pools it can use to offset the new taxes. That will let it keep its monthly payout at $0.07 a share, for an annualized yield of 7.7%. Best Buy....
PLEASE NOTE: In next week’s Successful Investor Hotline, we’ll reveal our #1 stock pick for 2011. Don’t miss this unique opportunity to profit. TORSTAR CORP., $12.50, Toronto symbol TS.B, has received $40 million in connection with the takeover of The Globe and Mail newspaper by the Thomson family, which now owns 85% of the paper. BCE Inc. (Toronto symbol BCE) owns the remaining 15%. The proceeds are equal to 4% of Torstar’s $989-million market cap. The sale of The Globe and Mail is part of BCE’s plan to acquire full control of CTVglobemedia, the private company that owns the CTV Television Network, which consists of 27 TV stations. CTVglobemedia also owns 30 specialty channels and 34 radio stations. It also owned The Globe and Mail....
PLEASE NOTE: This is our last Hotline for 2010. Our next Hotline will go out on Friday, January 7, 2011. BANK OF MONTREAL, $58.00, Toronto symbol BMO, fell 6% on Friday after it agreed to buy Marshall & Ilsley Corp. (New York symbol MI), which provides banking and financial services through 374 branches in Wisconsin, Indiana, Missouri, Minnesota, Kansas, Arizona and Florida. The purchase doubles the size of Bank of Montreal’s U.S. retail-banking division. The bank is paying roughly $4.1 billion U.S. in stock for Marshall & Ilsley. That’s equal to 12% of Bank of Montreal’s $32.9-billion market cap. It aims to complete the purchase by July 31, 2011....
BANK OF MONTREAL, $61.74, Toronto symbol BMO, rose 4% this week after it reported earnings that matched the consensus estimate. In its 2010 fiscal year, which ended October 31, 2010, the bank earned $2.8 billion. That’s up 57.2% from $1.8 billion a year earlier. Earnings per share rose 54.2%, to $4.75 from $3.08, on more shares outstanding. Unusual items, such as severance costs and writedowns of securities the bank holds, depressed its fiscal 2009 earnings. If you exclude these items, earnings per share would have risen 19.9%. Earnings at Bank of Montreal’s main retail-banking division rose 7%, while its wealth-management business’s earnings gained 31%. However, earnings at its capital-markets division fell 6%. That’s because volatile stock markets and concerns over European sovereign debt hurt trading volumes. Revenue rose 10.4%, to $12.2 billion from $11.1 billion....
BHP Billiton’s failed bid for Potash Corp. helped draw investor attention to the fertilizer industry and agricultural commodities, such as wheat and corn. Prices for these agricultural products remain highly volatile, but their long-term outlook is bright. That’s because rising incomes in rapidly developing countries, like India and China, are spurring demand for more and better food. We feel that Agrium offers the best way to profit from rising food demand in these nations. The company is expanding in the Asia-Pacific region, and its growing retail business helps protect it from rapidly changing fertilizer prices. AGRIUM INC. $82 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 158.0 million; Market cap: $13.0 billion; Price-to-sales ratio: 1.3; Dividend yield: 0.1%; TSINetwork Rating: Average; www.agrium.com) makes fertilizers from natural gas at 14 plants in North America and Argentina. Calgary-based Agrium is located near large natural-gas producers in western Canada. As a result, it tends to pay less for its gas than its main competitors in the U.S. The company also makes other fertilizers, such as potash and phosphate, from mines in Ontario, Alberta, Saskatchewan and Idaho....
SAPUTO INC. $37 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 206.3 million; Market cap: $7.6 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.7%; TSINetwork Rating: Average; www.saputo.com) has fallen from its recent peak of $40 in November 2010. That’s mainly because possible listeria contamination forced it to recall cheese produced at one of its Quebec plants. The same bacteria forced Maple Leaf Foods Inc. (Toronto symbol MFI) to recall meat from its Toronto plant in 2008. However, this recall is much smaller. As well, there have been no reports of illness, so Saputo will likely not have to pay a large class-action settlement, as Maple Leaf did. Saputo continues to grow by purchasing other firms and assets. It is particularly interested in buying dairies in the U.S. and Australia. Growing by acquisition is more risky than internal growth, but Saputo has a long history of cutting costs at its new businesses....