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
PENGROWTH ENERGY TRUST, $9.76, Toronto symbol PGF.UN, has agreed to buy the 82% of Monterey Exploration Ltd. (Toronto symbol MXL) that it doesn’t already own. The deal should close in September 2010. Monterey produces oil and natural gas at properties in Alberta and British Columbia. Pengrowth is particularly interested in Monterey’s unconventional gas holdings in northeastern B.C. Monterey lacks the financial resources to develop these assets. That’s why it accepted Pengrowth’s offer. The trust will pay $366 million in units to take full control of Monterey. That includes $30 million of Monterey’s debt, which Pengrowth will assume....
BCE faces strong competition from cable companies and new wireless providers. However, a major cost-cutting drive has freed up cash for new investments in its networks. These savings also give BCE room for dividend increases, share buybacks and other moves that can pay off for investors. BCE INC. $32 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 763.0 million; Market cap: $24.4 billion; Price-to-sales ratio: 1.4; Dividend yield: 5.4%; SI Rating: Above Average) is Canada’s largest provider of telephone, Internet and wireless services. The company’s main subsidiary, Bell Canada, has 6.8 million residential and business customers in Ontario and Quebec. BCE sells wireless services to 6.9 million subscribers across Canada. As well, it has 2.1 million high-speed Internet customers and 2.0 million satellite-TV subscribers....
TORONTO-DOMINION BANK $72 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 868.2 million; Market cap: $62.5 billion; Price-to-sales ratio: 2.5; Dividend yield: 3.4%; SI Rating: Above Average) is expanding its commodity-related operations. This puts it in a position to profit from the rise in commodity prices that’s likely as the economy recovers. TD recently paid an undisclosed sum for Ross Smith Sousa Advisors Ltd., a Calgary-based firm that advises oil and gas producers on asset purchases and sales. Canada is likely to attract more foreign investment of all kinds in the next few years, due to our (relatively) strong national finances and the strength of the Canadian dollar. That’s especially likely in oil and gas, now that the BP oil spill has spurred demands for a stronger regulatory climate in the U.S....
BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $26 (Toronto symbol BA.UN, Conservative Growth Portfolio, Utilities sector; Units outstanding: 127.3 million; Market cap: $3.3 billion; Price-to-sales ratio: 1.0; Dividend yield: 11.2%; SI Rating: Above Average) will convert to a dividend-paying corporation on January 1, 2011. That’s when Ottawa will start taxing income-trust distributions. Investors will receive one common share of the company for each trust unit they hold. As part of the conversion, the trust will change its name to “Bell Aliant Inc.” It will also change its trading symbol to “BA”. The trust will continue to pay monthly distributions of $0.2417 a unit until just after its conversion. The current annual rate of $2.90 yields 11.2%. Starting in March 2011, Bell Aliant will change the rate and frequency of its payout: It will switch to quarterly dividends of $0.475 a share. The new annual rate of $1.90 would yield a high 7.3%, based on today’s price. As well, investors who hold Bell Aliant outside an RRSP will benefit from the dividend tax credit. Bell Aliant is a buy.
The BP oil spill in the Gulf of Mexico will probably lead to greater regulation of offshore drilling. Because of the extra costs, energy-exploration firms may turn their attention to safer onshore oil and natural-gas deposits, like Canada’s oil sands. That would help these three companies, which supply equipment and services to oil-sands producers. However, only two are buys right now. SNC-LAVALIN GROUP INC. $45 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $6.8 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.5%; SI Rating: Average) is a leading Canadian engineering and construction company. SNC designs and builds large public-works projects, such as roads, bridges, transit systems and water-treatment plants. It also builds mines, chemical plants and electrical power systems. Petroleum and chemical projects accounted for 14% of SNC’s 2009 revenue. Last year, the company designed a new steam-assisted gravity-drainage system for Husky Energy Inc.’s Sunrise oil-sands project. This technology injects steam into a well to loosen the heavy oil and make it easier to pump to the surface. SNC is working on similar systems for oil-sands projects jointly owned by Teck Resources Ltd. and UTS Energy Corp....
PRECISION DRILLING CORP. $7.33 (Toronto symbol PD; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 275.6 million; Market cap: $2.0 billion; Price-to-sales ratio: 1.8; No dividends paid since February 2009; SI Rating: Extra Risk) provides contract-drilling services, so it should also benefit from more onshore exploration in the wake of the BP oil spill. It owns 352 land-based rigs in Canada, the U.S. and Mexico. The company also recently renegotiated some of the loans it used to buy U.S.-based contract driller Grey Wolf Inc. in 2008. That will cut its annual interest costs by $15 million. Precision earned $62.0 million, or $0.22 a share, in the first three months of 2010. Precision Drilling is a buy.
TRANSALTA CORP. $21 (Toronto symbol TA; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 218.6 million; Market cap: $4.6 billion; Price-to-sales: ratio: 1.7; Dividend yield: 5.5%; SI Rating: Average) is working on Project Pioneer, which will capture and store carbon emissions from its coal-fired power plants in Alberta. The company plans to sell the reclaimed carbon to oil producers, who would use it to extract more oil. Enbridge Inc. (Toronto symbol ENB) recently agreed to participate in Project Pioneer. Enbridge’s pipeline and carbon-sequestration expertise should help ensure the project’s success. TransAlta is a buy.
Molson Coors and Andrew Peller continue to report slow sales because of the weak economy. However, both companies are finding innovative ways to expand their operations, and both continue to cut costs. These moves should help them maintain or increase their current dividends. MOLSON COORS CANADA INC. (Toronto symbols TPX.A $46 and TPX.B $46; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 185.6 million; Market cap: $8.5 billion; Price-to-sales ratio: 2.6; Dividend yield: 2.5%; SI Rating: Average) is the world’s fifth-largest brewer by volume. Its top brands include Coors Light, Molson Canadian and Carling. The company continues to enjoy the benefits of two mergers: In February 2005, Molson merged with U.S. brewer Coors. In 2008, it combined its U.S. operations with those of SABMiller to form a new joint venture called MillerCoors. The savings from these two deals are helping the company compete with larger, multinational brewers....
TORSTAR CORP. $10 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 79.0 million; Market cap: $790.0 million; Price-to-sales ratio: 0.6; Dividend yield: 3.4%; SI Rating: Above Average) will participate in a restructuring of The Canadian Press (CP), which provides news and other content to Canadian newspapers, radio and TV stations. Right now, CP is a not-for-profit organization. Under this new plan, Torstar will join with CTVglobemedia (which owns The Globe and Mail) and Gesca (which owns La Presse) to convert CP into a regular corporation. Torstar did not say how much it will invest. However, the restructuring will improve CP’s long-term prospects and ensure that it continues to provide a wide variety of content to Torstar’s newspapers. Torstar is a buy.
MDS INC. $9.62 (Toronto symbol MDS; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 67.2 million; Market cap: $646.5 million; Price-to-sales ratio: 9.0; No dividends paid since October 2006; SI Rating: Extra Risk) supplies medical isotopes for cancer detection and research. The company gets most of these isotopes from the Chalk River nuclear reactor near Ottawa. Atomic Energy of Canada Ltd., which operates the reactor, shut it down in May 2009 after it discovered a water leak. Atomic Energy should restart the reactor by the end of July 2010. Meanwhile, the shutdown continues to hurt MDS’s revenue and earnings. In its second quarter, which ended April 30, 2010, MDS lost $52 million, or $0.51 a share (all amounts except share price and market cap in U.S. dollars). A year earlier, it lost $6 million, or $0.06 a share. However, the latest earnings included a $27-million non-cash foreign-exchange charge....