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
HOME CAPITAL GROUP INC. $42 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.7 million; Market cap: $1.5 billion; Price-to-sales ratio: 3.0; Dividend yield: 1.5%; SI Rating: Average) is the parent company of Home Trust Company, which is a federally regulated firm that provides residential first mortgages to small business owners, the self-employed and others who don’t meet the stricter criteria of larger, traditional lenders. Home mortgages account for 80% of the company’s loan portfolio. The remaining 20% includes non-residential mortgages, credit cards and other types of loans. It operates five retail branches in Toronto, Vancouver, Calgary, Montreal and Halifax.
Strong history of growth
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TORONTO-DOMINION BANK $71 earned $1.4 billion in its first quarter, which ended January 31, 2010. That’s up 31.2% from $1.1 billion a year earlier. Earnings per share rose 26.0%, to $1.60 from $1.27, on more shares outstanding. Thanks to the improving economy, TD set less money aside to cover bad loans. Its loan-loss provisions fell 17.9%, to $517 million from $630 million. That was the main reason for the higher earnings. Best Buy. BANK OF NOVA SCOTIA $49 is the target of a $300-million class-action lawsuit that accuses it of failing to pay overtime to over 5,000 current and former employees. A judge has certified the suit. However, Bank of Nova Scotia will probably appeal, as another judge recently dismissed a similar suit against CIBC. Whatever the outcome, any award will likely be small next to the $988 million, or $0.91 a share, that Bank of Nova Scotia earned in the three months ended January 31, 2010. Best Buy. LOBLAW COMPANIES LTD. $36 has had great success with its “Joe Fresh” line of clothing and accessories. Joe Mimran, the designer behind Joe Fresh, now hopes to build on this success with other non-food merchandise that Loblaw sells, including furniture, home electronics and toys. Buy.
TORSTAR CORP., $9.03, Toronto symbol TS.B, rose 40% this week. That’s because the company reported greatly improved results. In 2009, Torstar earned $35.6 million, or $0.45 a share. That’s a big improvement over the $158.7 million, or $2.01 a share, it lost in 2008. However, the 2008 results included a $136.9-million writedown of Torstar’s 20% stake in CTVglobemedia, which owns the CTV television network, several specialty-TV channels and The Globe and Mail. If you exclude all unusual items, per-share earnings fell 4.3%, to $0.66 from $0.69. That beat the consensus earnings estimate of $0.64 a share. Torstar’s 2009 revenue fell 5.4%, to $1.45 billion from $1.53 billion. Revenue at the newspaper division (which accounts for 66% of Torstar’s total revenue) fell 9.7%. However, revenue at the Harlequin book-publishing division (34% of revenue) rose 4.3%....
TRANSCANADA CORP., $34.78, Toronto symbol TRP, has set aside $22 billion for new growth projects. The company already spent $10 billion of these funds. It will spend the remaining $12 billion over the next four years. TransCanada will invest some of these funds in the Keystone pipeline, which will pump crude oil from Alberta to refineries in Illinois. Keystone should begin operating later this year. The company will also build new natural-gas-fired power plants in Ontario and Arizona. As well, it plans to refurbish reactors at the Bruce nuclear-power station in Ontario (TransCanada owns 48.8% of these reactors), and build new wind farms in eastern Canada....
TECK RESOURCES LTD., $39.78, Toronto symbol TCK.B, rose 5% this week after the company announced that it had signed a new shipping agreement with Westshore Terminals Income Fund (Toronto symbol WTE.UN). Teck ships coal from its British Columbia mines to Westshore’s Vancouver port, which loads and ships more coal than any other port on North America’s west coast. From there, trains carry Teck’s coal to its North American customers, and ships carry it to Asian steelmakers. Under the new deal, Westshore will process 3 million tonnes of coal a year for the next two years at fixed rates. That’s about 12% of the 25 million tonnes of coal that Teck should produce this year....
CANADIAN TIRE CORP., $52.29, Toronto symbol CTC.A, fell 3% this week after the company reported lower-than-expected 2009 earnings. During the year, Canadian Tire earned $348.0 million, or $4.26 a share. That’s down 12.2% from $396.4 million, or $4.86 a share, in the prior year. These figures exclude several one-time items, including gains and losses on sales of securities by Canadian Tire’s finance division. The company also paid a penalty for redeeming debentures before their expiry date. That will let it take advantage of the improvement in the credit markets to issue new bonds at lower interest rates. Without these one-time items, analysts were expecting Canadian Tire to earn $4.34 a share. Revenue fell 4.8%, to $8.7 billion from $9.1 billion. Overall sales at the company’s main retail division, which consists of its Canadian Tire stores and the PartSource auto-parts chain, fell 2.8%, while same-store sales were 4.2% lower. Weak sales of electronics offset stronger sales of household-cleaning, kitchen and pet-care goods. As well, a lack of snow in Ontario and Quebec hurt sales of winter merchandise, such as snow shovels....
The outlook for fertilizers is bright. Rising populations in developing countries will prompt farmers to increase food production. As well, more countries are turning to biofuels, such as ethanol from corn, to cut air pollution and fossil-fuel use. However, fertilizer prices have become highly volatile in the past few years. To cut your risk, we recommend low-cost producers that can withstand and take advantage of these price swings. For example, Potash Corp.’s large reserves will last decades. That means it won’t have to spend large sums on exploration. Agrium needs natural gas to make its products, so it will benefit from new gas discoveries in North America. POTASH CORP. OF SASKATCHEWAN INC. $112 (Toronto symbol POT; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 296.0 million; Market cap: $33.2 billion; Price-to-sales ratio: 7.8; Dividend yield: 0.4%; SI Rating: Average) is the world’s largest fertilizer producer. It has six potash mines in Saskatchewan and one in New Brunswick. Five of its mines have reserves of between 60 and 97 years....
One of our key rules for successful investing is to diversify — spread your money out across most, if not all, of the five main economic sectors: Manufacturing & Industry; Resources & Commodities; Consumer; Finance; and Utilities. If you follow this rule, you improve your chances of making money over long periods, no matter what happens in the market. For example, manufacturing stocks may suffer if raw-material prices rise, but in that case your Resources stocks will gain. Rising wages can put pressure on manufacturers, but your Consumer stocks should do better as workers spend more....
Canada’s big telephone companies have faced strong competition from cable companies for years. This experience will help them deal with three new entrants in the wireless field. One of these new competitors, Wind Mobile, is already operating. Two more, Mobilicity and Public Mobile, should launch later this year. Meanwhile, all four major phone companies are using their steady cash flows to expand and improve their wireless and high-speed Internet networks. That will fuel their long-term growth, and let them keep paying or raise their current dividends. BCE INC. $29 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 767.2 million; Market cap: $22.2 billion; Price-to-sales ratio: 1.3; Dividend yield: 6.0%; SI Rating: Above Average) provides telephone and Internet services in Ontario and Quebec. It also sells wireless and satellite TV services across Canada....
CGI GROUP INC. $14 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 292.7 million; Market cap: $4.1 billion; Price-to-sales ratio: 1.1; No dividends paid; SI Rating: Extra Risk) is Canada’s largest provider of computer-outsourcing services. In CGI’s first quarter, which ended December 31, 2009, its earnings rose 13.0%, to $80.7 million from $71.4 million a year earlier. Earnings per share rose 17.4%, to $0.27 from $0.23, on fewer shares outstanding. These figures exclude unusual tax refunds. Revenue fell 8.7%, to $913.0 million from $1.0 billion. CGI gets 40% of its revenue from outside of Canada, so the higher Canadian dollar hurt the company’s overall revenue. However, CGI won $1.6 billion of new contracts in the latest quarter. Its order backlog of $11.4 billion is three times its annual revenue. CGI Group, our #1 stock for 2010, is a buy.