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
CGI GROUP INC. $16 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 285.6 million; Market cap: $4.6 billion; Price-to-sales ratio: 1.3; No dividends paid; SI Rating: Extra Risk) continues to win new computer-outsourcing contracts. For example, the company recently signed a seven-year deal with Ontario’s Beer Store retail chain. Under the contract, CGI will help The Beer Store improve the efficiency of its distribution network. This will help the Beer Store expand its sales and earnings by avoiding shortages of top-selling beer brands. The company did not reveal the contract’s exact value, but it did say that it is a multi-million-dollar deal. As well, CGI will manage the Atlantic Lottery Corp.’s data centre and provide related support services. This seven-year deal is worth $125 million. These contracts are tiny next to CGI’s annual revenue of $3.8 billion. But long-term deals like these give it steady, predictable revenue streams. They also help CGI build customer loyalty, and sell more services to new clients....
AGRIUM INC. $59 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 157 million; Market cap: $9.3 billion; Price-to-sales ratio: 1.0; Dividend yield: 0.2%; SI Rating: Average) has purchased 24 retail stores in Argentina. These stores sell fertilizers, seeds and a variety of other agricultural products to farmers. Agrium now has 56 stores in Argentina. It also bought a plant that makes herbicides, insecticides and other crop-protection products. Agrium did not say how much it paid for these businesses. However, they should add $57 million U.S. to its annual revenue of $9.3 billion U.S. Adding retail stores makes sense for Agrium, because its retail operations cut its exposure to volatile fertilizer prices. Agrium’s retail division supplied 30% of its 2009 profits....
CAE INC. $9.71 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 256.5 million; Market cap: $2.5 billion; Price-to-sales ratio: 1.6; Dividend yield: 1.2%; SI Rating: Average) makes military and airline flight simulators. It also runs commercial and military pilot-training schools in 20 countries. CAE’s shares have held up well, despite recent stock-market volatility. That’s because it has diversified its operations over the past few years. Military clients now supply 53% of CAE’s revenue. As well, steady revenues from pilot training account for two-thirds of its civilian business. These factors cut CAE’s reliance on new simulator sales for growth.
CAE still dominates its niche market
...
POTASH CORP. OF SASKATCHEWAN $97 has moved down from its recent peak of $130 in March 2010. That’s partly because heavy rain in western Canada and parts of the U.S. Midwest have delayed the spring planting season. This has cut demand for the company’s potash and other fertilizers. Despite this setback, Potash Corp.’s long-term outlook remains bright. Buy. INDIGO BOOKS & MUSIC INC. $14 is testing demand for photographic products and services at two of its 75 large-format bookstores. Customers can bring in their digital photos for printing, and create specialized photo albums. They can also have their picture taken by a professional photographer. Indigo feels that selling photo services will nicely complement its gift and toy merchandise. Products and services like these also cut Indigo’s reliance on selling books. Buy. HART STORES INC. $1.49 lost $0.10 a share in its first quarter, which ended May 1, 2010. That’s a lot worse than the $0.04 a share that the retailer lost a year earlier. Sales rose 0.2%, to $35.04 million from $34.96 million. However, same-store sales fell 0.4%. That’s because milder-than-normal weather hurt demand for winter merchandise. As a result, the company had to cut prices to clear unsold merchandise. Hold.
SUNCOR ENERGY INC., $33.08, Toronto symbol SU, owns 60% of the proposed Fort Hills oil-sands project in northern Alberta. The company received its stake in Fort Hills as part of its August 2009 takeover of Petro-Canada. UTS Energy Corp. (Toronto symbol UTS) and Teck Resources (see below) each own 20% of Fort Hills. Suncor rose 7% this week after French oil company Total S.A. agreed to buy UTS at a substantial premium. UTS’s 20% stake in Fort Hills is the company’s major asset, so the takeover helped unlock some of the project’s value. In light of rising construction costs, Suncor is still deciding whether to go ahead with the project. It expects to make a decision by the end of 2010....
PLEASE NOTE: Our next Hotline will go out on Friday, July 9, 2010. GENNUM CORP., $6.60, Toronto symbol GND, earned $4.1 million, or $0.12 a share (all amounts except share price in U.S. dollars) in the three months ended May 31, 2010. That’s a big improvement over the $1.1 million, or $0.03 a share, it lost a year earlier. Gennum makes chips and other electronic equipment that lets television broadcasters store, edit and transfer video signals without losing picture quality. It also makes chips that improve the flow of data inside computer networks....
CANADIAN IMPERIAL BANK OF COMMERCE, $74.75, Toronto symbol CM, is buying the Canadian MasterCard credit-card business of U.S.-based Citigroup Inc. (New York symbol C). Right now, CIBC only issues Visa cards, so this purchase will diversify its credit-card business. The bank did not reveal the purchase price. However, the Canadian MasterCard business has $2.1 billion of outstanding credit-card loans. As of April 30, 2010, CIBC had $12.4 billion of credit-card loans outstanding. The bank expects to complete this purchase by October 31, 2010. It should add to CIBC’s earnings in the first year....
SAPUTO INC., $29.71, Toronto symbol SAP, earned $382.7 million, or $1.83 a share, in the fiscal year ended March 31, 2010. That’s up 37.2% from $278.9 million, or $1.34 a share, in the prior year. The latest earnings matched the consensus estimate. Revenue rose just 0.3% during the year, to $5.81 billion from $5.79 billion. The company raised its cheese prices during the year. However, the higher Canadian dollar hurt the contribution of Saputo’s U.S. dairy operations, which account for 33% of its revenue. Saputo plans to finish consolidating its various southern Ontario warehouses into a single new facility later this year. That should lower its costs by $6.5 million a year, starting in 2011....
Over the past few decades, I’ve often pointed out that the top five Canadian banks have provided some of the highest returns with least risk that you could find in our market. That’s why I’ve long recommended that all Canadian investors own two or more. The top five banks slumped deeply during the 2007-2009 market downturn, like most stocks. But since the market turnaround of March 2009, several of the top five have recovered and gone on (at least briefly) to all-time highs. Few other stock groups have done as well. We continue to recommend all five, but our favourite is still Bank of Nova Scotia (we analyze the other four banks later in this issue)....
MAPLE LEAF FOODS INC. $9.27 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 136.8 million; Market cap: $1.3 billion; Price-to-sales ratio: 0.2; Dividend yield: 1.7%; SI Rating: Average) slumped 4% on June 8, on news that the Ontario Teachers’ Pension Plan plans to sell its 35.3% stake in the company. Investors worry that some hidden problem has prompted the pension plan to sell Maple Leaf. The McCain family, which owns 31.6% of Maple Leaf, seems uninterested in buying the Teachers’ stake. However, major investors sell major investments (or choose not to buy out partners who want to sell) for a variety of reasons. The Teachers pension plan has been shifting away from common stocks and into real estate, foreign companies, private companies and other investments for a decade. Canadian stocks formerly made up a majority of the plan’s holdings. Now they represent 9%. Maple Leaf is the plan’s biggest single holding of a listed company. It bought more Maple Leaf as recently as late 2008....