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
ATCO LTD. (Toronto symbols ACO.X (class I non-voting) $51 and ACO.Y (class II voting) $51; Shares outstanding: 58.4 million; Market cap: $3.0 billion; Price-to-sales ratio: 0.9; Dividend yield: 2.1%; SI Rating: Above Average) is a Calgary-based holding company. ATCO’s main subsidiary is 52.2%-owned Canadian Utilities Ltd. (also in this issue). ATCO has three main divisions: Utilities (which distributes electricity and natural gas); Energy (which operates power plants); and Structures & Logistics (which provides services to energy exploration and construction companies). ATCO owns 75.5% of the Structures & Logistics division; Canadian Utilities owns the remaining 24.5%. Earlier this year, the company paid a $3.0 million premium in connection with the buyback of $150 million of its preferred shares. However, the buyback should save it $3.9 million in dividend payments in 2010....
Great-West Lifeco and IGM Financial get a big part of their earnings from fee income that varies with the value of the securities they manage. Rising stock markets have increased earnings at both companies. As well, both are taking fewer writedowns on bonds and mortgage-backed securities because of improving credit markets. GREAT-WEST LIFECO INC. $25 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 947.9 million; Market cap: $23.7 billion; Price-to-sales ratio: 0.7; Dividend yield: 4.9%; SI Rating: Above Average) is Canada’s largest insurance company, with $460.2 billion of assets under management. That’s up 4.1% in the past year. Great-West also sells retirement-planning and wealth-management services....
HOME CAPITAL GROUP INC. $43 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.7 million; Market cap; $1.5 billion; Price-to-sales ratio: 3.1; Dividend yield: 1.5%; SI Rating: Average) specializes in residential first mortgages to small business owners, the self-employed and others who don’t meet the stricter criteria of larger, traditional lenders. The company earned a record $1.25 a share in the three months ended June 30, 2010. That’s up 26.3% from $0.99 a year earlier. Low interest rates continue to fuel strong demand for new mortgages. As well, Home Capital recently began offering credit cards and other types of consumer loans. Bad loans fell to 0.67% of its total loan portfolio from 1.26% a year earlier. Home Capital Group is a buy.
IMPERIAL OIL LTD. $39 (Toronto symbol IMO; Conservative Growth Portfolio, Resources sector; Shares outstanding: 847.6 million; Market cap: $33.1 billion; Price-to-sales ratio: 1.4; Dividend yield: 1.1%; SI Rating: Average) has formed a new joint venture with parent company ExxonMobil Corp. (New York symbol XOM) and BP plc (New York symbol BP). This new company will explore for oil and natural gas in the Beaufort Sea. Imperial and Exxon will each own a 25% stake in the venture, and BP will own 50%. Underwater exploration in the arctic is hugely expensive, so this joint venture will help all three partners lower their costs. Developing these offshore fields would also help Imperial with its plan to build a new pipeline that would pump gas from the Mackenzie Delta to Alberta. However, exploration will have to wait while regulators review offshore drilling safety standards in the wake of BP’s oil spill in the Gulf of Mexico....
TRANSCANADA CORP. $36 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 690.0 million; Market cap: $24.8 billion; Price-to-sales ratio: 3.0; Dividend yield: 4.4%; SI Rating: Above Average) recently began pumping crude oil from Alberta to refineries in the U.S. Midwest through the first phase of its $12-billion U.S. Keystone pipeline project. It is now building the second phase, which should begin operating in 2011. TransCanada plans to add a third phase to this project. Called Keystone XL, this new pipeline will supply oil refineries in Texas. U.S. environmentalists and politicians have criticized Keystone XL. In response, TransCanada will reduce the pressure of the oil in the pipeline. That will lower the line’s capacity, but it should help TransCanada secure approval for the project. The company hopes to complete Keystone XL by the end of 2013....
CANADIAN NATIONAL RAILWAY CO. $64 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 465.4 million; Market cap: $29.8 billion; Price-to-sales ratio: 3.8; Dividend yield: 1.7%; SI Rating: Above Average) operates the largest freight rail network in Canada. It also serves 16 U.S. states. Ottawa nationalized CN in 1922, as railways were critical to Canada’s early growth. CN became a publicly traded company in 1995. CN hauls grain and fertilizers (20% of its 2009 revenue), consumer and industrial goods (20%), petroleum products (19%), forest products (17%), metals and minerals (11%), coal (7%) and automotive products (6%). Revenue rose 17.2%, from $7.2 billion in 2005 to $8.5 billion in 2008, mainly due to acquisitions. However, 2009 revenue fell 13.1%, to $7.4 billion....
BCE INC. $32 has raised its quarterly dividend for the fourth time in less than two years. The new annual rate of $1.83 a share, up 5.2% from $1.74, yields 5.7%. Best Buy. MOLSON COORS CANADA INC. $47 earned $1.25 a share in the second quarter of 2010. That’s up 12.6% from $1.11 a share a year earlier (all amounts except share price in U.S. dollars). The higher earnings mainly resulted from ongoing cost cuts, as well as savings from its MillerCoors brewing joint venture in the U.S. Sales rose 10.5%, to $1.3 billion from $1.2 billion. Best Buy. PENGROWTH ENERGY TRUST $10 reported that in the three months ended June 30, 2010, its combined oil and natural-gas production fell 8.1% from a year earlier. That’s because unusually wet weather in western Canada hindered its drilling operations. However, the average selling price for its oil and gas rose 9.0%. That pushed up its cash flow by 12.1% in the quarter. Buy.
MANITOBA TELECOM SERVICES INC., $24.98, Toronto symbol MBT, fell 9% on Friday after the company cut its quarterly dividend by 34.6%, to $0.425 a share from $0.65. The new annual rate of $1.70 yields 6.8%. The company is the main provider of telephone services in Manitoba. Its Allstream subsidiary sells telephone, Internet and other communication services to businesses across Canada. The slow economy has cut business spending on new communication systems. That has hurt Allstream’s earnings. As well, Manitoba Telecom’s consumer businesses continue to face strong competition from cable companies....
CGI GROUP INC., $14.70, 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 matched the consensus estimate. But an unexpected revenue drop caused stock to fall 10%. In its third quarter, which ended June 30, 2010, CGI earned $85.9 million. That’s up 12.0% from $76.7 million a year earlier. Earnings per share rose 20.0%, to $0.30 from $0.25, on fewer shares outstanding....
ENCANA CORP., $32.22, Toronto symbol ECA, fell 4% after the company reported lower-than-expected earnings. In the three months ended June 30, 2010, Encana earned $81 million, or $0.11 a share (all amounts except share price in U.S. dollars). These figures exclude a $340-million loss on hedging contracts that the company uses to lock in selling prices for its natural gas, and a $246-million foreign-exchange loss. On this basis, the latest earnings fell well short of the consensus estimate of $0.22 a share. They were also down 82.8% from the company’s year-earlier earnings of $472 million, or $0.63 a share. Cash flow per share fell 13.2%, to $1.65 from $1.90. Revenue rose 10.2%, to $1.5 billion from $1.3 billion. (Note: The year-earlier figures assume that the break-up of the old EnCana Corp. into the new Encana and Cenovus Energy Inc. took place at the start of 2009 instead of December 1, 2009.)...