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
MDS INC., $8.30, Toronto symbol MDS, hopes to complete the sale of its MDS Analytical Technologies business by the end of January. This division makes mass spectrometers that detect and measure substances in blood and other patient samples. The sale will generate $650 million for MDS (all amounts except share price in U.S. dollars). It will use $400 million to $450 million of these funds to buy back shares. MDS is still looking to sell its pharma-services division, which conducts contract-drug research for pharmaceutical companies. When it does sell, MDS will probably use the proceeds for more share buybacks....
Next week, Wall Street Stock Forecaster, our newsletter that focuses on the U.S. stock markets, will reveal its #1 pick for 2010. Don’t miss this unique opportunity to profit. If you’re not already a Wall Street Stock Forecaster subscriber, click here to learn how you can get one month free when you subscribe today. SUNCOR ENERGY INC., $36.71, Toronto symbol SU, will cut 1,000 jobs by the end of 2010. That’s on top of the 1,000 jobs Suncor has already cut following its takeover of Petro-Canada in August 2009. In total, these cuts represent about 16% of the 12,900 employees who worked for both companies before the takeover. Suncor did not say how much these new cuts would cost it, but it still expects the Petro-Canada takeover to save it $300 million to $400 million a year....
We’ve chosen CGI Group is our “Stock of the Year” for 2010. It differs from past #1 picks in that it’s not a dividend payer and we rate it as Extra Risk. But we’ve followed it a long time and feel it may have set off on a rise that lasts years beyond 2010. The company took its present form in September 1981, and first sold shares to the public for $0.81 each (adjusted for splits) in December 1986. In June 2002, we added CGI to the stocks we analyze in Stock Pickers Digest, our newsletter for aggressive investors. It was then trading at $8.75. In December 2007, we thought the company had matured enough to suit more conservative investors, so we moved it to The Successful Investor. The stock has gained 50% since then....
ENCANA CORP. $36 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 751.2 million; Market cap: $27.0 billion; Price-to-sales ratio: 1.9: Dividend yield: 2.3%; SI Rating: Average) was also in the running for our 2010 “Stock of the Year.” It would be a more traditional pick for us, with its dividend and higher rating, and we think it has a great long-term outlook. However, when we choose a Stock of the Year, we look for something with a reasonably sure outlook for the current year. This year, EnCana has a lot riding on the weather. EnCana’s natural-gas properties in Alberta, British Columbia, Colorado, Wyoming and Texas account for 4% of North America’s daily production....
Things are going well for Canada’s big five banks. Low interest rates continue to spur strong demand for new loans. As well, loan defaults should fall as the economy improves. Despite strong gains in their stock prices since last March’s lows, all five continue to trade at attractive multiples to earnings. Canadian and international banking regulators are working on new rules that will help the global banking industry avoid another credit crisis. In response, Canada’s banks are prudently conserving their cash instead of raising dividends. We feel the banks will resume their pattern of annual dividend hikes when the new rules take effect in 2011. Every investor should aim to hold at least two banks in the Finance segment of their portfolio. Bank of Nova Scotia, which has a strong presence in fast-growing regions, such as Asia and Latin America, remains our favourite for new buying....
TRANSALTA CORP. $24 (Toronto symbol TA; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 198.0 million; Market cap: $4.8 billion; Price-to-sales ratio: 1.7; Dividend yield: 4.8%; SI Rating: Average) is expanding its Kent Hills wind farm in New Brunswick. That’s because it won a 25-year power contract from the provincially owned electrical utility. The company will expand Kent Hills’ capacity to 150 megawatts from 96 megawatts in partnership with Natural Forces Technologies Inc. (NFT), a local wind-power developer. NFT owns 17% of Kent Hills, and will have an option to buy an additional 17% by the end of 2010, when the partners expect to finish the expansion. The project will cost roughly $100 million. TransAlta earned $66 million, or $0.34 a share, in the third quarter of 2009....
IGM FINANCIAL INC. $42 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 263.9 million; Market cap: $11.1 billion; Price-to-sales ratio: 4.7; Dividend yield: 4.9%; SI Rating: Above Average) reported that as of December 31, 2009, its assets under management had risen 1.8%, to $120.5 billion from $118.4 billion at November 30, 2009. IGM’s clients redeemed $25.5 million worth of investments in December, so improving stock markets were entirely responsible for the higher assets under management. IGM’s fees rise and fall with the value of the mutual funds it manages, so its revenue and earnings improve when the value of these assets rises. IGM Financial is a buy.
AGRIUM INC. $70 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 157.0 million; Market cap: $11.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 0.2%; SI Rating: Average) is spending $800 million to expand production at its potash mine at Vanscoy, Saskatchewan (all amounts except share price and market cap in U.S. dollars). The company earned $46 million, or $0.29 a share, in the three months ended September 30, 2009. By 2015, the expansion will increase this mine’s annual production by 37%. That will help Agrium take advantage of the improving outlook for fertilizer. Agrium is a buy. SNC-LAVALIN GROUP INC. $52 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.1 million; Market cap: $7.9 billion; Price-to-sales ratio: 1.2; Dividend yield: 1.2%; SI Rating: Average) is part of 50/50 joint venture that will build this expansion and provide engineering services. Its $400 million U.S. share of the contract is equal to about 6% of its annual revenue....
Lower oil and natural gas prices weighed on the cash flow and stock prices of these two resource trusts in 2009. However, recent announcements should improve their prospects in 2010. PENGROWTH ENERGY TRUST $11 (Toronto symbol PGF.UN; Aggressive Growth Portfolio, Resources sector; Units outstanding: 289.5 million; Market cap: $3.2 billion; Price-to-sales ratio: 1.9; Dividend yield: 7.6%; SI Rating: Average) produces oil and natural gas, mainly from properties in western Canada. Natural gas accounts of 60% of its production; oil supplies the remaining 40%. The extra exposure to gas has hurt the trust lately, as gas prices are down more than oil prices. In 2010, Pengrowth will spend $285 million on exploration, developing its current properties, and buying new properties. That’s up 29.5% from $220 million in 2009. About 70% of this spending will go to oil projects, including $15 million for its Lindbergh oil-sands project. Lindbergh could account for 40% of Pengrowth’s reserves when it begins producing crude oil in six years. The trust will also spend $12 million on its the promising Horn River shale-gas discovery in B.C....
SUNCOR ENERGY INC. $38 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.6 billion; Market cap: $60.8 billion; Price-to-sales ratio: 2.2; Dividend yield: 1.1%; SI Rating: Average) saw its oil-sands properties’ average daily production fall to 219,000 barrels in December 2009. That’s down 30.3% from 314,000 barrels in the previous month. The drop was caused by a fire at an upgrader, which converts the tar-like bitumen into refinery-ready crude. The outage has forced Suncor to cut daily production at its main oil-sands project north of Fort MacMurray, Alberta. However, the lower output should have little impact on the company’s cash flow. Suncor expects to complete repairs by the end of January 2010. Suncor Energy is a buy.