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
TECK RESOURCES LTD. $39 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 589.5 million; Market cap: $23.0 billion; Price-to-sales ratio: 2.4; Dividend yield: 1.0%; SI Rating: Average) is a leading producer of metallurgical coal, a key ingredient in steelmaking. Coal accounted for 46% of Teck’s 2009 revenue, and 54% of its earnings. Teck also produces copper (28%, 31%) and zinc (26%, 15%). Thanks to higher coal and copper prices, Teck’s earnings rose 110.1% in the three months ended June 30, 2010, to $376 million from $179 million a year earlier. In July 2009, Teck sold $1.7 billion of class-B subordinate-voting shares to a Chinese sovereign wealth fund, and used the proceeds to pay down debt. Because of the extra shares outstanding, earnings per share rose 74.2% in the latest quarter, to $0.64 from $0.37....
IGM FINANCIAL INC. $40 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 261.7 million; Market cap: $10.5 billion; Price-to-sales ratio: 4.3; Dividend yield: 5.1%; SI Rating: Above Average) reported that its clients redeemed $244.1 million of investments in August 2010, mainly because of recent stock-market volatility and the uncertain economy. Still, on August 31, 2010, IGM had $118.6 billion of assets under management. That’s up 3.5% from $114.7 billion a year earlier. IGM’s fees rise and fall with the value of the mutual funds and other securities it manages, so the company’s revenue and earnings benefit when the value of these assets rises. IGM Financial is a buy.
One part of our three-part investment program is to invest mainly in well-established companies. (The other two parts are to spread your money across the five main economic sectors and avoid stocks in the broker/public-relations limelight.) Well-established stocks, like the three we analyze below, cut your risk during times of economic uncertainty. All three are leaders in their niche markets. That helps them attract and retain customers. As well, their strong balance sheets would let them buy weaker competitors and expand their market shares. Moreover, despite their recent gains, they are reasonably priced in relation to earnings. FINNING INTERNATIONAL INC. $22 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 171.0 million; Market cap: $3.8 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.2%; SI Rating: Above Average) sells, rents and repairs heavy equipment, such as tractors, bulldozers and trucks, made by Caterpillar Inc. Finning’s major customers are in the mining, forest-products and construction industries in western Canada, the U.K. and South America....
ATCO LTD. (Toronto symbols ACO.X [class I non-voting] $53 and ACO.Y [class II voting] $52; Income Portfolio; Utilities sector; Shares outstanding: 58.2 million; Market cap: $3.1 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.0%; SI Rating: Above Average) is selling its travel-agency business, which supplies less than 2% of the gas and electric utility operator’s total revenue....
ARBOR MEMORIAL SERVICES INC. $24 (Toronto symbol ABO.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 10.6 million; Market cap: $254.4 million; Price-to-sales ratio: 0.9; Dividend yield: 1.8%; SI Rating: Average) owns 41 cemeteries, 26 crematoria, five reception centres and 82 funeral homes in eight provinces. In Arbor’s third quarter, which ended July 25, 2010, its earnings rose 8.5%, to $6.4 million, or $0.61 a share, from $5.9 million, or $0.55 a share, a year earlier. Revenue jumped 31.3%, to $81.0 million from $61.7 million. Sales of cemetery plots and headstones jumped 53.1%. That’s because the new harmonized sales tax in Ontario and B.C. prompted customers in those provinces to make their purchases before the tax took effect on July 1, 2010. Arbor Memorial Services is a hold.
CGI GROUP INC. $15 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 279.5 million; Market cap: $4.2 billion; Price-to-sales ratio: 1.1; No dividends paid; SI Rating: Extra Risk) is Canada’s largest provider of computer-outsourcing services. It also operates in 15 other countries. Canada provided 60% of CGI’s revenue in its latest fiscal quarter, followed by the U.S. (35%) and Europe (5%). CGI follows what it calls a “Build and Buy” strategy. The “Build” part refers to expanding relationships with its existing clients and attracting new ones. The company’s outsourcing contracts typically last 5 to 10 years. That gives it steady, predictable revenue streams. The “Buy” part of the company’s strategy involves making acquisitions. CGI cuts the risk of growing by acquisition by purchasing smaller companies that enhance its products, or expand its geographic reach....
THE WESTAIM CORP. $0.56 (Toronto symbol WED; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 580.6 million; Market cap: $325.1 million; Price-to-sales ratio: 1.5; No dividends paid; SI Rating: Speculative) completed its $286.3-million purchase of Montreal-based Jevco Insurance Co. on March 26, 2010. Jevco sells insurance to high-risk drivers, as well as owners of motorcycles, snowmobiles and recreational vehicles. Westaim earned $5.5 million, or $0.01 a share, in the three months ended June 30, 2010. It lost $4.5 million on its personal auto-insurance business due to higher accident claims in Ontario. However, its commercial vehicle insurance business earned $7.5 million in the latest quarter. Before the Jevco purchase, Westaim had no operations. As a result, it lost $514,000, or $0.01 a share, in the year-earlier quarter. Westaim is a hold.
DUNDEE CORP. $12 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 71.2 million; Market cap: $854.4 million; Price-to-sales ratio: 0.7; No dividends paid; SI Rating: Average) is a holding company with subsidiaries in three main areas: wealth management, real estate and resources. In the three months ended June 30, 2010, Dundee earned $51.2 million, or $0.64 a share. That’s up 71.5% from $29.9 million, or $0.39 a share, a year earlier. In the latest quarter, Dundee realized a $45.7-million gain on the sale of securities. A year earlier, these gains totalled just $120,000. That was the main reason for the higher earnings. Dundee is a hold....
ANDREW PELLER LTD. $8.26 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.9 million; Market cap: $123.1 million; Price-to-sales ratio: 0.5; Dividend yield: 4.0%; SI Rating: Above Average) is Canada’s second-largest wine producer, after Vincor Canada. Peller operates wineries in British Columbia, Ontario and Nova Scotia. It also imports wines from other countries and sells home winemaking kits. In its first quarter, which ended June 30, 2010, Peller’s sales fell 0.8%, to $64.5 million from $65.0 million a year earlier. The company continues to benefit from the launch of new products and steady demand for its premium brands. However, lower export ales and weaker demand for home winemaking kits offset these gains. Peller earned $4.0 million, or $0.28 a share, in the latest quarter. That’s up 21.0% from $3.3 million, or $0.23 a share, in the year-earlier quarter. If you exclude gains on hedging contracts that the company uses to lock in foreign-exchange rates, earnings would have risen by 31.5%....
METRO INC. $45 (Toronto symbol MRU.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 105.8 million; Market cap: $4.8 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.5%; SI Rating: Average) operates roughly 660 grocery stores in Quebec and Ontario. Its major banners include Metro, Metro Plus, Super C and Food Basics. As well, Metro operates 267 drug stores, including 81 inside its supermarkets. The company also owns roughly 23% of Alimentation Couche-Tard Inc. (Toronto symbol ATD.B), which operates over 6,000 convenience stores in Canada and the U.S. Couche-Tard is a recommendation of Stock Pickers Digest, our publication for aggressive investors. This investment accounts for about 5% of Metro’s annual earnings.