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
LINAMAR CORP. $19 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.7 million; Market cap: $1.2 billion; Price-to-sales ratio: 0.7; Dividend yield: 1.3%; SI Rating: Extra Risk) gets about 90% of its revenue by selling transmissions and other parts to carmakers. It also makes self-propelled, scissor-type elevating work platforms under the Skyjack name, plus consumer products, such as lawn mowers and cargo trailers. The company’s revenue rose 7.0%, from $2.2 billion in 2005 to $2.3 billion in 2007. However, its revenue fell 27.6%, to $1.7 billion, in 2009. That’s because the recession cut new-car demand. Linamar’s earnings rose 7.9%, from $101.0 million in 2005 to $109.0 million in 2007. Earnings per share rose 9.1%, from $1.43 in 2005 to $1.56 in 2007, on fewer shares outstanding. Earnings fell 48.6% to $56.0 million, or $0.84 a share, in 2008....
CAE INC. $9.33 has won a contract to train maintenance technicians for the 17 new Hercules planes that will replace Canada’s existing fleet of military transport aircraft. The multi-year deal is worth $90 million. That’s small next to CAE’s annual revenue of $1.6 billion. However, military customers now account for just over half of CAE’s revenue and earnings. That cuts its exposure to the cyclical airline industry. Best Buy. MOLSON COORS CANADA INC. $45 has raised its quarterly dividend by 16.7%, to $0.28 U.S. a share from $0.24 U.S. The new annual rate of $1.12 U.S. yields 2.6%. Buy. MANITOBA TELECOM SERVICES INC. $28 has introduced a dividend reinvestment plan that lets shareholders use their cash dividends to buy new shares at a 3% discount to the market price. Buy....
BANK OF NOVA SCOTIA, $49.23, Toronto symbol BNS, rose 3% this week after the bank reported higher earnings and revenue in its latest quarter. In the three months ended April 30, 2010, Bank of Nova Scotia earned a record $1.1 billion, or $1.02 a share. That’s up 25.8% from $872 million, or $0.81 a share, a year earlier. The latest earnings also beat the consensus estimate of $0.91 a share. Revenue rose 7.7%, to $3.9 billion from $3.7 billion. Most of the earnings increase came from the Canadian retail-banking division, which supplies 45% of the bank’s total earnings. This division’s profits jumped 42.4%, mainly because low interest rates spurred demand for mortgages and personal loans....
BANK OF MONTREAL, $61.70, Toronto symbol BMO, gained 6% this week after it reported quarterly earnings that were far ahead of the consensus estimate of $1.10 a share. In its second quarter, which ended April 30, 2010, the bank’s earnings jumped 108.1%, to $745 million from $358 million a year earlier. Earnings per share rose 106.6%, to $1.26 from $0.61, on more shares outstanding. Revenue climbed 14.8%, to $3.0 billion from $2.7 billion. Trading volumes have recovered with global stock markets. That pushed up earnings at the bank’s capital-markets division by 38%, to $259 million. As well, low interest rates continue to spur strong demand for loans. As a result, earnings at Bank of Montreal’s Canadian retail-banking division rose 16% to $396 million....
The Greek bailout and the poor financial state of major countries rattled the market again this week. Everybody agrees that high government debt and deficit spending are serious problems that must be fixed, but opinions differ about urgency. The biggest pessimists see government debt-and-deficits as terminal conditions that are too far advanced to be reversed. Others see the debt-deficit as more akin to a serious case of high blood pressure – a risk factor, not a death sentence. My view is that a combination of budget cuts, economic growth and a dash of inflation may be enough to gradually unwind the debt-and-deficits problem over a period of years if not decades....
CANADIAN TIRE CORP., $57.22, Toronto symbol CTC.A, rose 8% this week after the company reported better-than-expected earnings. In the three months ended April 3, 2010, Canadian Tire earned $49.4 million, or $0.61 a share. That’s down 0.6% from $49.7 million, or $0.61 a share, a year earlier. If you exclude unusual items, such as losses on property sales, earnings per share would have risen 3.3%, to $0.63 from $0.61. On that basis, the latest earnings beat the consensus estimate of $0.55 a share. Sales rose 4.1%, to $1.83 billion from $1.76 billion. Overall sales rose 2.1% at the company’s main retail division, which consists of its Canadian Tire stores and the PartSource auto-parts chain. The division’s same-store sales rose 1.7%. Warmer-than-normal spring weather pushed up demand for seasonal items, such as bicycles and patio furniture. That helped offset lower sales of winter merchandise, like snow blowers....
Suncor is new to our Conservative Growth Portfolio. We added it last August after it bought Petro-Canada, one of our long-time recommendations. We avoided Suncor before the merger. Its focus on high-cost oil-sands production made it more volatile than other high-quality oil companies, and left it with more to lose if oil prices fell. However, the Petro-Canada takeover diversified Suncor’s operations. As well, cost savings from the merger will help it fund new oil-sands projects and pay down debt. SUNCOR ENERGY INC. $33 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.6 billion; Market cap: $52.8 billion; Price-to-sales ratio: 1.7; Dividend yield: 1.2%; SI Rating: Average) became Canada’s largest oil company when it bought Petro-Canada (old symbol PCA) on August 1, 2009. Petro-Canada shareholders received 1.28 Suncor shares for each Petro-Canada share they held....
TELUS CORP. (Toronto symbols T $40 and T.A $38; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 333.6 million; Market cap: $13.3 billion; Price-to-sales ratio: 1.3; Dividend yield: 5.0%; SI Rating: Above Average) recently upgraded its wireless networks to handle a wider variety of cellphones, including Apple’s hugely popular iPhone smartphone. These investments are starting to pay off: In the three months ended March 31, 2010, Telus’s earnings rose 2.5%, to $0.83 a share from $0.81 a year earlier. However, revenue in the quarter was unchanged at $2.4 billion. That’s because lower local and long-distance revenue offset higher sales of wireless and Internet services. Telus also raised its quarterly dividend by 5.3%, to $0.50 a share from $0.475. The new annual rate of $2.00 yields 5.0% (5.3% for the non-voting ‘A’ shares)....
ENCANA CORP. $33 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 748.7 million; Market cap: $24.7 billion; Price-to-sales ratio: 1.7; Dividend yield: 2.5%; SI Rating: Average) continues to expand its unconventional natural-gas holdings. In May 2010, the company bought 250,000 acres in the Collingwood shale-gas deposit in Michigan. Shale gas is natural gas that is trapped in rock formations. To extract it, companies must pump water and chemicals into the rock. This fractures the rock and releases the natural gas. Early test wells indicate that Collingwood could hold as much gas as Encana’s other major shale-gas holdings in Louisiana and northeastern B.C. Encana paid $37.5 million for this land (all amounts except share price and market cap in U.S. dollars). That’s small next to the $1.2 billion, or $1.57 a share, of cash flow that the company generated in the three months ended March 31, 2010....
Food ingredient costs have been rising, and that’s starting to weigh on these four food companies. However, all four have strong brands and loyal customers. That should let them pass on most of these extra costs. These companies have also been finding ways to improve their productivity. We like all four, but only three are buys right now. TIM HORTONS INC. $34 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 176.2 million; Market cap: $6.0 billion; Price-to-sales ratio: 2.7; Dividend yield: 1.5%; SI Rating: Average) is one of Canada’s largest fast-food restaurant chains. Its 3,015 outlets mainly serve coffee and donuts. The company also has 563 stores in the U.S. Franchisees operate 99.5% of Tim Hortons’ coffee-and-donut shops. The company gets about two-thirds of its revenue from supplying these outlets with coffee, baked goods and related items. (Rents and franchise fees account for the remaining third of its revenue.) Tim Hortons owns its own bakeries and warehouses. That gives it strong quality control, and lets it use its buying power to negotiate better ingredient costs....