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
CAE INC. $11 (>www.cae.com) has renewed its pilot-training agreement with European aircraft maker Airbus until 2017. Under this alliance, CAE trains pilots to fly a wide range of Airbus planes at 18 training centres around the world. The need for new pilots is growing as current pilots retire. Long-term deals like this will help CAE profit from this trend. Best Buy. BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $27 (>www.bellaliant.ca) earned $0.47 a unit in the three months ended September 30, 2010, down 23.0% from $0.61 a year earlier. A charge related to the early redemption of notes accounted for about half of the decline. Cash flow per share fell 6.9%, to $0.84 from $0.91. Bell Aliant continues to lose phone customers. But it has been investing in its high-speed Internet networks. That should help it hang on to more clients, and attract new ones. Buy. CANADA BREAD CO. LTD. $45 (>www.canadabread.ca) earned $0.85 a share in the three months ended September 30, 2010, down 15.0% from $1.00 a year earlier. The company is spending more to promote its products, and develop new ones. This was the main reason for the earnings drop. Sales fell 3.1%, due to lower volumes and the negative impact of foreign-exchange rates. Hold.
TORONTO-DOMINION BANK, $72.23, Toronto symbol TD, fell 4% this week, even though the bank reported higher revenue and earnings in its 2010 fiscal year, which ended October 31, 2010. Revenue rose 9.6%, to $19.6 billion from $17.9 billion in fiscal 2009. Earnings rose 10.9%, to $5.2 billion from $4.7 billion. Earnings per share rose 7.9%, to $5.77 from $5.35, on more shares outstanding. These figures exclude unusual items, such as costs to integrate the recently purchased South Financial Group, Inc., which operates bank branches in Florida and the Carolinas. On this basis, the latest earnings fell short of the consensus estimate of $5.81 a share. The bank continues to set aside less money to cover bad loans. That’s the main reason why earnings at TD’s retail-banking business rose 53.7% in the U.S. and 25.2% in Canada. Earnings from wealth management rose 7.4%. However, earnings from TD’s trading business fell 23.8%, due to lower trading volumes, a drop in underwriting activity, and fewer gains from its investment portfolio....
BANK OF NOVA SCOTIA, $53.59, Toronto symbol BNS, is buying the 82% of DundeeWealth Inc. (Toronto symbol DW) that it does not already own. DundeeWealth manages investments and operates a brokerage business. The company also owns the Dynamic family of mutual funds, and provides financial-planning and investment advice. DundeeWealth is a recommendation of Stock Pickers Digest, our newsletter for aggressive investing. The deal will double the size of Bank of Nova Scotia’s mutual-fund business, and make it the fifth-largest mutual-fund company in Canada. It gives also gives the bank a number of new growth opportunities: Bank of Nova Scotia will now be able to sell more of its products and services to DundeeWealth’s high-quality clientele. As well, the bank may sell Dynamic funds through its branches in Asia and Latin America. Moreover, by expanding its wealth-management business, Bank of Nova Scotia is putting itself in a position to profit as more baby boomers approach retirement....
EMERA INC., $31.13, Toronto symbol EMA, is Nova Scotia’s main electricity supplier. This week, the company agreed to participate in a major new hydroelectric project on the Churchill River in Labrador. Under the terms of the deal, Nalcor Energy, which is owned by the Newfoundland government, will build a new power plant at Muskrat Falls. Emera and Nalcor will then form a joint venture that will transmit the plant’s power to the island of Newfoundland. Emera will pay $600 million for a 29% stake in this new regulated transmission utility....
CGI GROUP INC., $16.68, Toronto symbol GIB.A, is Canada’s largest provider of computer-outsourcing services. The company’s services help its customers automate certain routine functions, such as accounting and buying supplies. That makes its clients more efficient, and lets them focus on their main businesses. This week, the company reported earnings that exceeded the consensus estimate. This caused the stock to gain 8%. On August 17, 2010, CGI paid $923.2 million for Stanley Inc., which provides computer-outsourcing services to military and civilian agencies of the U.S. government. If you exclude costs to integrate these new operations, the company earned $342.0 million in its 2010 fiscal year, which ended September 30, 2010. That’s up 14.0% from $300.0 million a year earlier....
In the past few years, Telus has invested heavily in its wireless networks. These upgrades have been costly, but they are paying off, particularly as more people use mobile devices to access the Internet. The shift to wireless has forced Telus to restructure its traditional phone business. One-time costs, including severance payments, have held back its earnings in the past two years. The company has completed most of these changes, so its earnings should start rising again. As well, its improving outlook is freeing up more cash for dividends. TELUS CORP. (Toronto symbols T $45 and T.A $43; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 320.7 million; Market cap: $14.4 billion; Price-to-sales ratio: 1.5; Dividend yield: 4.7%; TSINetwork Rating: Above Average; www.telus.com) is Canada’s second-largest telephone company after BCE Inc. (Toronto symbol BCE, see Updating BCE Inc., Royal Bank of Canada and Pengrowth Energy Trust)....
We are now including company web sites for each investment we cover. Company web sites can give you further information on stocks we recommend, including press releases, newspaper articles, financial reports and shareholder information, plus dividend reinvestment plan details. Of course, our in-house investment experts thoroughly research each company we recommend....
In light of today’s low interest rates, we continue to recommend that income-seeking investors buy high-quality utility stocks instead of bonds. These five utilities’ dividend yields have come down lately, but that’s because their stock prices are rising, not because they are cutting their payouts. In fact, all five have been raising their dividends, and their steady cash flows will let them continue to do so. FORTIS INC. $32 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 173.7 million; Market cap: $5.6 billion; Price-to-sales ratio: 1.5; Dividend yield: 3.5%; TSINetwork Rating: Above Average; www.fortis.ca) is the main supplier of electrical power in Newfoundland and Prince Edward Island. It also operates power plants in other parts of Canada, as well as the U.S., Belize and the Cayman Islands. Fortis’ other businesses include Terasen Inc., which distributes natural gas in B.C., and hotels in Atlantic Canada....
TRANSCANADA CORP. $37 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 693.0 million; Market cap: $25.6 billion; Price-to-sales ratio: 3.0; Dividend yield: 4.3%; TSINetwork Rating: Above Average; www.transcanada.com) has opened its $350-million U.S. Kibby wind farm in Maine. The wind-power industry has grown quickly in recent years, largely due to government subsidies. However, high budget deficits have spurred rising political opposition to these subsidies. Still, wind-power accounts for just 4% of TransCanada’s total generating capacity of 10,800 megawatts. TransCanada is a buy.
SNC-LAVALIN GROUP INC. $56 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.2 million; Market cap: $8.5 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.2%; TSINetwork Rating: Average; www.snclavalin.com) has paid $37 million for an undisclosed stake in a private company that is building a toll highway in India. This is a small deal for SNC, which earned $128.2 million, or $0.84 a share, in the three months ended September 30, 2010. However, SNC has expertise in this area through its 16.77% stake in Ontario’s 407 toll highway. That will help make the Indian project more profitable, and cut its risk. SNC-Lavalin is a buy.