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
LOBLAW COMPANIES LTD. $33 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 276.6 million; Market cap: $9.1 billion; Price-to-sales ratio: 0.3; Dividend yield: 2.5%; SI Rating: Above Average) bought Toronto’s old Maple Leaf Gardens hockey arena for $13 million in 2004. The company had hoped to convert it into a supermarket by now, but held off because of rising construction costs. The building is also an historical landmark, which limits Loblaw’s ability to make changes. The company now aims to reopen the facility in 2011 under a new deal with nearby Ryerson University. Loblaw will build a new supermarket and a Joe Fresh clothing store on the ground floor. Ryerson will build a full-sized ice rink and other recreational facilities on the upper floors. Loblaw and Ryerson will each contribute $20 million to the project. Ottawa will also provide $20 million under its economic stimulus plan. To put these figures in context, Loblaw earned $189 million, or $0.69 a share, in the third quarter of 2009....
AGRIUM INC. $68 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 157.0 million; Market cap: $10.7 billion; Price-to-sales ratio: 1.0; Dividend yield: 0.2%; SI Rating: Average) is still trying to buy U.S.-based fertilizer maker CF Industries Holdings Inc. (New York symbol CF). Agrium is offering $5.3 billion in cash and shares (all amounts except share price and market cap in U.S. dollars). CF has rejected Agrium’s offer, and is pursuing its own hostile takeover of fertilizer company Terra Industries Inc. (New York symbol TRA). CF moved a step closer to taking over Terra when it recently replaced three of Terra’s directors with it own nominees. Agrium will now use the same tactic, and nominate its own directors to CF’s board at next year’s annual meeting. However, it seems likely that CF will buy Terra before then. If that happens, Agrium will drop its bid. Moreover, CF’s shareholder-rights plan will continue to block any takeover unless CF’s current directors negotiate a deal with Agrium....
MDS INC. $7.83 (Toronto symbol MDS; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 120.1 million; Market cap: $940.4 million; Price-to-sales ratio: 0.7; No dividends paid since October 2006; SI Rating: Extra Risk) has three businesses: MDS Analytical Technologies sells mass spectrometers that detect and measure substances in blood and other patient samples; MDS Pharma Services conducts contract-drug research for pharmaceutical companies; and MDS Nordion supplies medical isotopes for cancer research. The company recently agreed to sell its Analytical Technologies business for $650 million (all amounts except share price and market cap in U.S. dollars). U.S. anti-trust regulators are still examining the deal, but it should close in early 2010. MDS will use $400 million to $450 million of these funds to buy back shares. It will probably put the remaining proceeds toward its $245-million long-term debt, which is about a quarter of its market cap. MDS also holds cash of $298 million, or $2.48 a share....
Bombardier and CAE continue to diversify. This cuts their exposure to the air-travel industry, which has struggled lately. Both stocks are also attractive in relation to their earnings. BOMBARDIER INC. (Toronto symbols BBD.A $4.53 and BBD.B $4.51; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $7.7 billion; Price-to-sales ratio: 0.4; Dividend yield: 2.2%; SI Rating: Extra Risk) is the world’s third-largest maker of commercial aircraft, behind Boeing and Airbus. Bombardier’s aerospace division supplies roughly half of its revenue, and two-thirds of its profits. The remaining revenue and earnings come from Bombardier’s transportation division, which is the world’s largest maker of passenger railcars and commuter trains....
FORTIS INC. $27 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 170.7 million; Market cap: $4.6 billion; Price-to-sales ratio: 1.2; Dividend yield: 3.9%; SI Rating: Above Average) earned $36 million in the third quarter of 2009, down 26.5% from $49 million a year earlier. Earnings per share fell 32.3%, to $0.21 from $0.31, on more shares outstanding. However, the company’s Terasen natural-gas distribution business in B.C. and its electrical-power division in Alberta paid lower taxes in the year-earlier quarter because of an income-tax settlement. Without these one-time year-ago benefits, Fortis’s earnings would have fallen by just 2.7% this year. Fortis is a buy.
LINAMAR CORP. $14 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 64.7 million; Market cap: $905.8 million; Price-to-sales ratio: 0.5; Dividend yield: 0.9%; SI Rating: Extra Risk) will close its plant in eastern Ontario in the next few months. The company feels the plant, which makes parts for brakes, suspensions and other auto systems, is no longer profitable. It is also Linamar’s only facility outside of its main operations in southwestern Ontario. The company did not say how much it would have to pay in severance. Meanwhile, Linamar earned $0.02 a share in the three months ended September 30, 2009. That’s down 90.9% from $0.22 a year earlier. However, it’s a big improvement over the $0.16 a share it lost in the second quarter of 2009. These figures exclude writedowns and severance payments related to previous plant closures. Sales fell 22.1%, to $421.1 million from $540.4 million. However, the company has won $300 million in new contracts this year, partly because some of its competitors went bankrupt during the recession. Linamar is a buy....
ENCANA CORP. $30 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 750.2 million; Market cap: $22.5 billion; Price-to-sales ratio: 2.1; Dividend yield: n.a.; SI Rating: Average) and CENOVUS ENERGY INC. $25 (Toronto symbol CVE; Conservative Growth Portfolio, Resources sector; Shares outstanding: 750.2 million; Market cap: $18.8 billion; Price-to-sales ratio: 1.1; Dividend yield: n.a.; SI Rating: Extra Risk) are now trading as separate stocks after EnCana split itself into two separate companies. One kept the EnCana name and trading symbol, and focuses on unconventional natural gas. The other operates as Cenovus Energy Inc. and specializes in oil-sands projects, oil refineries and conventional natural gas. Shareholders received one share in each of the two new firms for every EnCana share they owned. EnCana recommends that shareholders allocate 51.5% of their adjusted cost base to the new EnCana, and 48.5% to Cenovus. The two stocks could stagnate for some months while investors evaluate them. However, we see both as buys for long-term gains.
GREAT-WEST LIFECO INC. $24 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 944.7 million; Market cap: $22.7 billion; Price-to-sales ratio: 0.7; Dividend yield: 5.1%; SI Rating: Above Average) is Canada’s largest insurance company, with $340.7 billion of assets under management. It also offers retirement planning and wealth-management services. Power Corp. owns 68.7% of Great-West’s shares. The company gets 50% of its earnings from Canada, followed by Europe (30%) and the U.S. (20%). Great-West’s revenue rose 171.4%, from $28.2 billion in 2004 to $76.5 billion in 2008. Earnings rose from $1.50 a share (or a total of $1.2 billion) in 2004 to $2.26 a share (or $2.0 billion) in 2008.
Putnam purchase behind gains
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CANADIAN NATIONAL RAILWAY CO. $58 will drop its plan to increase its locomotive engineers’ monthly mileage cap by roughly 13%. In return, the union representing these workers agreed to go back to work after a short strike. The two sides will continue to negotiate salaries and other details. If they can’t agree, they will submit to binding arbitration. That eliminates the possibility of a long walkout. Buy. FINNING INTERNATIONAL INC. $16 is selling seven Caterpillar mining trucks and nine tractors to Shell Canada Energy. This equipment will help Shell increase production at one of its oil-sands properties in Alberta. Finning did not disclose the exact value of this order, but it was probably between $50 million and $60 million. That’s about 1% of its $5.2 billion of annual revenue. Buy. BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $28 will let investors who own 99 or fewer units sell them at no commission cost through a special offer that expires February 19, 2010. For information, call CIBC Mellon Trust Company at 866-271-6893. We feel you should only take advantage of this offer if Bell Aliant is inappropriate for your portfolio, or if you only hold a few units. Buy.
TORONTO-DOMINION BANK, $65.33, Toronto symbol TD, had to set aside more funds to cover bad loans in its latest fiscal year. However, the bank still reported higher earnings, as low interest rates spurred strong demand for new loans. TD earned $4.7 billion in the year ended October 31, 2009. That’s up 23.7% from $3.8 billion in the prior year. Earnings per share rose 9.6%, to $5.35 from $4.88, on more shares outstanding. These figures exclude several unusual items, including writedowns of securities the bank holds, and costs to integrate U.S.-based Commerce Bancorp, which TD bought last year. On that basis, the latest earnings beat the $5.07 a share that analysts were expecting. Loan-loss provisions jumped 133.3%, to $2.5 billion from $1.1 billion. Revenue rose 21.8%, to $17.9 billion from $14.7 billion....