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
BOMBARDIER INC. (Toronto symbols BBD.A $5.16 and BBD.B $5.18; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $8.8 billion; Price-to-sales ratio: 0.5; Dividend yield: 1.9%; SI Rating: Extra Risk) will launch a new, bigger version of its Global Express business jet in October 2010. This new plane will help it compete with rival Gulfstream, which has released a business jet that is 20% larger than Bombardier’s current model. The company will probably build a stretched version of its current plane, instead of designing a whole new model. That will keep its development costs down. Bombardier is a buy. The subordinate-voting “B” shares are the better choice, because of their slightly better liquidity and higher dividend yield....
MDS INC. $10 (Toronto symbol MDS; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 67.2 million; Market cap: $672.0 million; Price-to-sales ratio: 3.4; No dividends paid since October 2006; SI Rating: Extra Risk) supplies medical isotopes for research, detecting cancer and sterilizing surgical tools. The company gets most of its isotopes from the Chalk River nuclear reactor near Ottawa. In May 2009, Atomic Energy of Canada Ltd., which operates the reactor, shut down Chalk River to repair a water leak. Atomic Energy restarted the reactor in August 2010, but plans to permanently close it in 2016. That’s why MDS recently signed a new deal to buy isotopes from Rosatom State Corp., a Russian state-owned company. The deal gives MDS the exclusive right to distribute Rosatom’s isotopes outside of Russia until 2020....
PENGROWTH ENERGY TRUST $11 (Toronto symbol PGF.UN; Aggressive Growth Portfolio, Resources sector; Units outstanding: 291.3 million; Market cap: $3.2 billion; Price-to-sales ratio: 2.1; Dividend yield: 7.6%; SI Rating: Average) is one of North America’s largest energy royalty trusts. Its main properties are in Alberta, B.C. and Saskatchewan. The trust 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 Pengrowth’s production is natural gas. The remaining 40% is oil. Investors see this a negative in light of today’s low gas prices. However, a colder-than-normal winter could cause gas prices to shoot up again. Pengrowth’s focus on proven properties with large reserves and predictable production rates also tempers its risk.
New properties spurred revenue jump
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AGRIUM INC. $77 has received approval from Australian regulators to purchase AWB Ltd., which operates over 400 farm-supply stores in Australia and New Zealand. AWB is also Australia’s largest wheat exporter. Agrium is paying $1.2 billion (Australian) for AWB. That’s equal to 10% of Agrium’s $12.2-billion (Canadian) market cap. The deal will close later this year. AWB’s close proximity to Asia will help Agrium profit from rising food demand in the region. Buy. INDIGO BOOKS & MUSIC INC. $16 plans to expand the variety of toys, gifts, home decor and other non-book merchandise that it sells through its web site. Right now, these products account for 17% of Indigo’s overall sales, but less than 5% of its online sales. The company aims to get 10% of its online sales from non-book merchandise over the next three years. Indigo has also upgraded its Kobo e-book reader. This new model should spur e-book sales, which now account for about 6% Indigo’s total sales. Buy. METRO INC. $44 aims to buy back up to 8.5% of its outstanding class A subordinate shares over the next year. Under its previous authorization, the company spent $155.6 million on share repurchases. That’s equal to 43% of the $359.0 million, or $3.23 a share, that Metro earned in its latest fiscal year. Buy.
POTASH CORP. OF SASKATCHEWAN, $145.00, Toronto symbol POT, has moved down from its recent peak of $160.65. That’s mostly because the Canadian government appears more likely to block or impose conditions on BHP Billiton Ltd.’s (New York symbol BHP) $130.00 U.S.-a-share takeover of Potash Corp. As well, Potash Corp. has launched a lawsuit to stop the takeover. The suit accuses BHP of making misleading statements about the potash industry to depress Potash Corp.’s share price prior to making its offer. Potash Corp. is still a hold....
CENOVUS ENERGY INC., $28.74, Toronto symbol CVE, has received regulatory approval to expand its Foster Creek oil-sands project in northern Alberta. Cenovus owns 50% of this project; U.S.-based oil company ConocoPhillips (New York symbol COP) owns the other 50%. The company will expand Foster Creek in three phases over the next seven years. When the expansion is finished, Foster Creek’s average daily production will rise to 210,000 barrels from the current 120,000 barrels. Cenovus has also asked for approval for a fourth phase, which would bring Foster Creek’s average daily production up to 235,000 barrels, starting in 2019. Cenovus’ share is 117,500 barrels. To put these figures in context, Cenovus’ average daily production, including natural gas, was 253,733 barrels in its latest quarter....
POTASH CORP. OF SASKATCHEWAN, $151.59, Toronto symbol POT, continues to trade above the $130.00 U.S.-a-share hostile takeover offer from BHP Billiton Ltd. (New York symbol BHP). That’s partly due to rumours that Potash Corp.’s management is planning to buy a majority interest in the company using borrowed funds. Some of these funds would probably come from several Chinese firms, as well as some sovereign wealth funds from China and other countries. (Sovereign wealth funds are state-owned investment funds that are usually financed by an economic surplus.) However, sovereign wealth funds would only hold a minority stake in Potash Corp. That would help the buyers win regulatory approval for a takeover....
BCE INC., $32.99, Toronto symbol BCE, is buying full control of CTVglobemedia, the private company that owns the CTV Television Network, which consists of 27 TV stations. CTVglobemedia also owns 30 speciality channels, 34 radio stations and The Globe and Mail newspaper. BCE has controlled the CTV television network before: in 2000, the company bought a majority interest in CTV as part of a “convergence” strategy to combine media content with its satellite TV, Internet and phone networks. The plan did not work out as well as BCE had hoped. So, in 2005, BCE sold most of its CTV stake to Woodbridge Co., the Ontario Teachers’ Pension Plan and Torstar Corp. (see below). Right now, BCE owns 15% of CTVglobemedia. It will pay $1.3 billion for the remaining 85%. The company will also assume $1.7 billion of CTVglobemedia’s debt. Following the purchase, BCE will sell 85% of The Globe and Mail to Woodbridge. These deals still need regulatory approval, but BCE expects to complete them in mid-2011....
It’s been nearly a year since the old EnCana Corp. split itself into two separate companies: one that focuses on unconventional natural gas (Encana), and one that specializes in oil-sands projects (Cenvous Energy). Shareholders received one share in each of the two new firms for every old EnCana share they held. The new Encana has suffered, mostly because of a recent drop in natural gas prices. As well, Cenovus has faced pressure from environmentalists who are opposed to oil-sands development. But the breakup helped unlock hidden value. As a result, both stocks should produce above-average results in the next few years. ENCANA CORP. $30 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 736.2 million; Market cap: $22.1 billion; Price-to-sales ratio: 1.8; Dividend yield: 2.8%; SI Rating: Average) is one of North America’s largest natural-gas producers....
POTASH CORP. OF SASKATCHEWAN INC. $156 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 296.6 million; Market cap: $46.3 billion; Price-to-sales ratio: 8.1; Dividend yield: 0.3%; SI Rating: Average) is the target of a $130.00 U.S.-a-share hostile takeover offer from BHP Billiton Ltd. (New York symbol BHP). We first added Potash Corp. to our Aggressive Growth Portfolio in our June 2009 issue as a hold. At that time, it was trading at $121. By October 2009, the stock had dropped to $106, and we changed our recommendation to buy. Based on today’s exchange rate, Potash Corp. shares trade at 15.7% more than BHP’s offer. That suggests investors expect a higher bid. Even if no new bid emerges, BHP’s offer represents a 27.2% gain over our first buy recommendation....