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
MANITOBA TELECOM SERVICES INC. $35 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 64.7 million; Market cap: $2.3 billion; Price-to-sales ratio: 1.2; Dividend yield: 7.4%; SI Rating: Average) has raised $200 million by selling new 10-year bonds that yield 5.625%. This cash will help the company fund a new high-speed wireless network that it is building in Manitoba in partnership with Rogers Communications Inc. (Toronto symbol RCI.B). Manitoba Telecom will spend $70 million on this new network, which should be ready by early 2011. The company also plans to spend $40 million over the next three years on upgrading its billing systems. As of September 30, 2009, Manitoba Telecom’s long-term debt was $853.9 million. If you add the proceeds from the bond sale, its long-term debt is still a manageable 46% of its market cap....
TECK RESOURCES LTD. $41 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 588.7 million; Market cap: $24.1 billion; Price-to-sales ratio: 2.8; No dividends paid since July 2008; SI Rating: Extra Risk) owns 22.5% of the Antamina copper and zinc mine in Peru. The other partners are BHP Billiton (33.75%), Xstrata (33.75%) and Mitsubishi Corp. (10%). In light of rising copper prices, the partners plan to increase Antamina’s production by 30%. Teck’s share of the expansion cost is $290 million U.S. To put this in context, Teck earned $337 million (Canadian), or $0.59 a share, in the third quarter of 2009. This project should be finished in late 2011. The partners recently increased their estimates of Antamina’s reserves by 75%. That means its reserves should last until 2029....
MOLSON COORS CANADA INC. (Toronto symbols TPX.A $47 and TPX.B $47; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 185 million; Market cap: $8.7 billion; Price-to-sales ratio: 2.9; Dividend yield: 2.1%; SI Rating: Average) is the world’s fifth-largest brewer by volume. Its major brands include Coors Light, Molson Canadian and Carling. The company gets 40% of its sales from Canada, followed by the U.S. (32%) and the U.K. (28%). In other markets, Molson Coors either licenses its brands to local brewers, or exports its beer directly. The company continues to enjoy the benefits of the February 2005 merger of Canadian brewer Molson Inc. and U.S.-based Adolph Coors Co. Canadian shareholders received exchangeable shares in Molson Coors Canada. The Canadian shares carry the same voting and dividend rights as common shares of the U.S. parent company, Molson Coors Brewing Co. (New York symbol TAP).
Lower costs continue to fuel profits
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POTASH CORP. OF SASKATCHEWAN $122 should benefit from the improving outlook for potash and other fertilizers. Prices fell sharply in 2009, because farmers used less fertilizer in light of lower crop prices. As well, good weather and large amounts of residual fertilizer in the soil led to better-than-expected harvests. However, use should return to normal levels in 2010. As well, China is likely to import more potash this year. That should push up fertilizer demand. Buy. LINAMAR CORP. $16 aims to cut its dependence on the cyclical auto-parts business by applying its expertise to new products. For example, it will start making turbine equipment for wind farms in 2011. Demand for this equipment is growing strongly as governments require utilities get more of their power from renewable sources. Buy. SHAWCOR LTD. $31 has formed a joint venture that will build a new plant in northwestern Russia. The plant will apply protective coatings on oil and natural-gas pipelines. The company will own 25% of this facility, and operate it under a four-year contract. Buy....
CGI GROUP INC., $14.50, Toronto symbol GIB.A, is our Stock of the Year for 2010. Next week, Stock Pickers Digest, our newsletter for aggressive investors, will reveal its #1 pick for 2010. Don’t miss this unique opportunity to profit. If you’re not already a Stock Pickers Digest subscriber, click here to learn how you can get one month free when you subscribe today. CGI is Canada’s largest provider of computer-outsourcing services. These help its customers automate certain routine functions, such as accounting and purchasing supplies. That lets CGI’s clients focus on their main businesses, and improve their efficiency. The company’s outsourcing contracts typically last 5 to 10 years. That gives it steady, predictable revenue streams. Long-term contracts also give CGI a chance to build customer loyalty, and sell more services to its existing clients....
BCE INC., $27.51, Toronto symbol BCE, has increased its quarterly dividend by 7.4%, to $0.435 a share from $0.405. The new annual rate of $1.74 yields 6.3%. This is the company’s third dividend hike since a private consortium led by the Ontario Teachers’ Pension Plan dropped its plan to buy BCE a year ago. BCE has also earmarked $500 million for share buybacks. That’s equal to 2.4% of its $20.9-billion market cap. From December 2008 to May 2009, the company spent $986 million to buy back 5% of its shares. Share buybacks increase the value of the remaining shares....
BANK OF NOVA SCOTIA, $47.51, Toronto symbol BNS, fell 3% this week, despite reporting higher earnings and revenue in its latest fiscal year. The bank earned $3.5 billion in the year ended October 31, 2009. That’s up 13.0% from $3.1 billion in the prior year. Earnings per share rose 8.5%, to $3.31 from $3.05, on more shares outstanding. If you exclude writedowns of securities, the bank would have earned $3.70 a share. That beat the $3.69 a share that analysts were expecting. The bank’s loan-loss provisions remained high because of the weak economy: it set aside $1.7 billion to cover bad loans in the latest fiscal year, up 176.8% from $630 million in the prior year. This figure will probably stay high until the second half of fiscal 2010....
For most of its 62-year history, grocery-store operator Metro focused solely on its home province of Quebec. In 2005, it successfully expanded to Ontario with its acquisition of the A&P chain. This purchase gave Metro the size it needed to compete with other supermarket chains, such as Loblaw, and with non-traditional food sellers, such as Wal-Mart. The company now aims to build on its recent success with several new initiatives. These include lowering its marketing costs by consolidating its banners and private-label brands. The company is also launching a new customer-loyalty program through a joint venture with a leading marketing firm. That should help it drive long-term sales growth. These initiatives will help Metro thrive in a fiercely competitive industry. Moreover, its stake in convenience-store operator Alimentation Couche-Tard is an overlooked asset....
Investors are paying more attention to dividends as volatile stock markets continue to recover. That’s because dividends are more dependable than capital gains as a source of income. In fact, dividends typically contribute up to a third of an investor’s long-term return. Tax cuts in recent years also mean that you pay roughly the same tax on dividend income and capital gains. To help you quickly identify and evaluate dividend-paying stocks, we’re now including the dividend yield (annual dividend rate divided by the current share price) in the basic information we present for each company we analyze....
The credit crisis and recession weighed heavily on these three information providers. They have also been hurt by competition from free information on the Internet. All three have cut their costs in response. That puts them in a good position to increase their earnings as the economy rebounds and advertising revenues grow again. As well, all are leaders in their niche industries and regions. That gives them an advantage over their competitors. We continue to see all three companies as buys for long-term gains....