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
AGRIUM INC., $88.15, Toronto symbol AGU, rose 8% this week after the U.S. Department of Agriculture predicted that U.S. corn production would fall 3% in 2010. Wheat production is also expected to be lower. That’s good news for fertilizer producers like Agrium, because farmers will aim to increase their crop yields in 2011 to make up for this year’s shortfall. That means they will likely use more fertilizer. Despite its recent rise, the stock still trades at a reasonable 17.8 times Agrium’s likely 2010 earnings of $4.91 U.S. a share. The company’s earnings could reach $6.09 U.S. a share in 2011. The stock trades at 14.3 times that estimate....
SNC-LAVALIN GROUP INC., $52.78, Toronto symbol SNC, is a leading Canadian engineering and construction company. SNC also owns 16.77% of Highway 407, a 108-kilometre toll highway north of Toronto. This week, the Canadian Pension Plan Investment Board (CPPIB) agreed to buy 10% of Highway 407 from the highway’s main shareholder, Ferrovial S.A. of Spain. Ferrovial currently owns 53% of 407. CPPIB agreed to pay $894.3 million for 10% of the 407. However, SNC intends to exercise its right of first refusal and buy these shares from Ferrovial. That will raise SNC’s stake in the highway to 26.77%....
Railways have been around since the 19th century, and they are still the safest, most energy-efficient way to move goods over land. They also face little competition from new competitors, because of the high cost of building new rail lines. Canadian Pacific remains our favourite railway for new buying. It has close relationships with major producers of coal, potash and other commodities. That gives it predictable revenue streams. As well, new, fuel-efficient locomotives and scheduling software are lowering CP’s costs. CANADIAN PACIFIC RAILWAY LTD. $63 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 168.7 million; Market cap: $10.6 billion; Price-to-sales ratio: 2.3; Dividend yield: 1.7%; SI Rating: Above Average) transports freight over a 25,000-kilometre rail network between Montreal and Vancouver. It also connects with major hubs in the U.S. Midwest and Northeast. The U.S. accounts for 30% of CP’s revenue....
TORSTAR CORP. $13 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.1 million; Market cap: $1.0 billion; Price-to-sales ratio: 0.7; Dividend yield: 2.8%; SI Rating: Above Average) will get $345 million for its 20% of CTVglobemedia, which BCE is acquiring. That’s roughly a third of Torstar’s market cap. Torstar may use some of this cash to reduce its long-term debt of $519.2 million. That would cut its interest costs, and free up cash for expanded Internet growth. Torstar recently paid an undisclosed sum for the 86% of travelalerts.ca that it did not already own. This site offers travel information and links to airfares....
The stock market downturn of 2008/2009 renewed investor interest in food stocks. That’s because food is a necessity of life, and food producers’ shares are much less volatile than those of cyclical companies, such as resource firms. To increase your returns and cut your risk, you should focus on food makers with strong brands, such as the three we analyze below. The popularity of their brands makes it easier for them to launch new products and expand their market shares. As well, all three have strong balance sheets that are letting them make acquisitions and build new plants. However, only two are buys right now. SAPUTO INC. $35 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 207.9 million; Market cap: $7.3 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.8%; SI Rating: Average) is Canada’s largest producer of dairy products, including milk, butter and cheese. The company also makes snack cakes and tarts. Aside from Saputo, its main brands include Neilson, Stella and Dairyland. The company also has operations in the U.S., Argentina and Europe....
SUNCOR ENERGY INC. $35 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.6 billion; Market cap: $56.0 billion; Price-to-sales ratio: 1.5; Dividend yield: 1.1%; SI Rating: Average) is building an 88-megawatt wind farm in Alberta. It should begin generating electricity by the end of 2011. TECK RESOURCES LTD. $44 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 589.5 million; Market cap: $25.9 billion; Price-to-sales ratio: 2.7; Dividend yield: 0.9%; SI Rating: Average) recently paid Suncor $66 million for 30% of this new wind farm. That means the entire project is worth $220 million. Building renewable-energy projects helps Suncor and Teck win favour with environmental regulators. As well, many governments require power-distribution utilities to pay producers higher rates for electricity from renewable sources. T
SNC-LAVALIN GROUP INC. $52 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 150.9 million; Market cap: $7.8 billion; Price-to-sales ratio: 1.3; Dividend yield: 1.3%; SI Rating: Average) has formed an alliance with Alusa Engenharia Ltda, a leading engineering firm in Brazil. Together, the two companies plan to bid on new infrastructure projects in Brazil, which is hosting the 2014 FIFA World Cup and the 2016 Summer Olympics. To support these events, the country plans to upgrade its roads, airports, stadiums and electrical grids. SNC has operated in Brazil for 40 years. Its long history in the country and its new partnership with Alusa improve its chances of winning new contracts. Meanwhile, spending on public-works projects in Canada and other countries is likely to speed up as the economy recovers....
TIM HORTONS INC. $37 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 176.2 million; Market cap: $6.5 billion; Price-to-sales ratio: 2.7; Dividend yield: 1.4%; SI Rating: Average) is one of Canada’s largest fast-food restaurant chains, with 3,040 outlets that mainly serve coffee and donuts. The company also has 587 stores in the U.S. Tim Hortons recently agreed to sell its half of its Maidstone Bakeries business to Aryzta AG of Switzerland. (Tim Hortons and Aryzta own the bakery through a joint venture.) Based in Brantford, Ontario, Maidstone supplies baked goods to Tim Hortons’ stores in Canada and the U.S. Tim Hortons will receive $475 million when the sale closes later this year. As part of the deal, Maidstone will continue to supply Tim Hortons until 2016. The company has the option to extend this agreement for another year, if necessary. That gives it plenty of time to find new suppliers, or build its own bakery....
BCE INC. $34 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 758.8 million; Market cap: $25.8 billion; Price-to-sales ratio: 1.4; Dividend yield: 5.4%; SI Rating: Above Average) is buying the 85% of CTVglobemedia that it does not already own. This private company owns the 27-station CTV Television Network. CTVglobemedia also owns 30 speciality channels, 34 radio stations and The Globe and Mail newspaper. This is the second time that BCE has bought CTV Television. In 2000, it paid $2.3 billion for 100% of CTV. It later merged CTV with The Globe and Mail into a new company called Bell Globemedia. BCE held 70% of this new company, and Woodbridge Co. (a private company owned by the Thomson family) held the remaining 30%. BCE felt that combining media content with its satellite TV, Internet and phone networks would help it compete with larger, international media/telecom companies....
BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $26 (Toronto symbol BA.UN, Conservative Growth Portfolio, Utilities sector; Units outstanding: 127.4 million; Market cap: $3.3 billion; Price-to-sales ratio: 1.1; Dividend yield: 11.2%; SI Rating: Above Average) provides telephone services in Atlantic Canada, as well as rural parts of Ontario and Quebec. BCE owns about 45% of Bell Aliant. At current prices, it would cost BCE $1.8 billion to buy the remaining units. In the first half of 2010, BCE’s cash flow was $1.4 billion, or $1.81 a share, so it could easily afford to buy both CTV and Bell Aliant. However, there’s little overlap between BCE and Bell Aliant, so there would be few cost savings from a merger. Still, the possibility of a takeover adds to Bell Aliant’s appeal....