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
BANK OF MONTREAL, $52.93, Toronto symbol BMO, earned $1.8 billion in its latest fiscal year, which ended on October 31, 2009. That’s down 9.7% from $2.0 billion in the prior year. Earnings per share fell 18.1%, to $3.08 from $3.76, on more shares outstanding. The latest earnings included several unusual charges. These include writedowns of securities the bank holds and severance costs from a 3% cut it made to its workforce. Without these items, the bank would have earned $4.02 a share in fiscal 2009. Analysts were expecting $3.98 a share on that basis. Revenue rose 8.4%, to $11.1 billion from $10.2 billion. That’s mainly because low interest rates continue to push up demand for mortgages and other loans. However, the bank set aside $1.6 billion for bad loans, up 20.5% from $1.3 billion in the prior year. Most of this increase came from its U.S. operations, particularly loans related to the commercial real-estate and manufacturing industries. The U.S. accounts for about 10% of the bank’s revenue....
LOBLAW COMPANIES LTD., $32.52, Toronto symbol L, gained 7% this week after it reported better-than-expected earnings. However, the food retailer’s sales fell short of analysts’ predictions. Loblaw earned $0.69 a share in the three months ended October 10, 2009, up 21.1% from $0.57 a year earlier. That beat the $0.62 a share that analysts were expecting. Savings from Loblaw’s restructuring plan were behind the gain. The company’s restructuring included fixing its supply networks, improving productivity at its distribution centres and installing new inventory-information systems. Sales fell 0.2%, to $9.47 billion from $9.49 billion. That fell short of the $9.62 billion that analysts were expecting. Same-store sales fell 0.6%, mainly because strong competition from other supermarkets, as well as discount retailers such as Wal-Mart and Costco, is forcing Loblaw to cut its prices. However, the company should continue to benefit from its lower operating costs. Moreover, well-known private-label brands, such as President’s Choice and Joe Fresh, will help Loblaw maintain its market share....
PENGROWTH ENERGY TRUST, $10.26, Toronto symbol PGF.UN, earned $78.3 million, or $0.30 a unit, in the three months ended September 30, 2009. That’s down 81.5% from $422.4 million, or $1.69 a unit, a year earlier. Cash flow per unit fell 42.7%, to $0.63 from $1.10. Revenue fell 37.3%, to $325.3 million from $518.7 million. These declines mainly reflect lower oil and natural-gas prices. On a combined basis, Pengrowth’s average selling price dropped 33%. As well, its average daily production fell 4%. That’s partly because of a maintenance shutdown at the Sable Offshore Energy Project last summer. The trust owns 8.4% of this business, which operates three offshore-drilling platforms south of Nova Scotia. In October, Pengrowth raised $285 million in a unit issue. It put these funds toward its $1.3-billion long-term debt, which is now a manageable 40% of its market cap. The trust also cut its monthly distributions by 30%, to $0.07 a unit from $0.10. The new annual rate of $0.84 yields 8.2%. Distributions accounted for 44% of Pengrowth’s cash flow in the latest quarter....
Maple Leaf Foods has suffered several setbacks in the past three to four years. Because of unfavourable foreign-exchange rates, the company stopped exporting fresh meat products as part of a plan to focus on its more-profitable packaged-food and bakery businesses. Last year, 21 people died of listeriosis (a form of food poisoning) after eating contaminated meat. That led to lost sales and a costly recall. Moreover, Maple Leaf had to pay $25 million to settle class-action lawsuits. Meanwhile, things are going well at Canada Bread. This subsidiary accounts for 76% of Maple Leaf’s market cap. That means you can buy Maple Leaf’s core meat-processing business for about $2.60 a share. That’s cheap in light of the company’s well-known brands, high market share and improving outlook. MAPLE LEAF FOODS INC. $11 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 134.0 million; Market cap: $1.5 billion; Price-to-sales ratio: 0.3; SI Rating: Average) is Canada’s largest food-processing company. It mainly makes its products, which include fresh and prepared meats and poultry, under the Maple Leaf and Schneider brands. This business accounts for roughly 60% of its revenue....
HOME CAPITAL GROUP INC. $43 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.5 million; Market cap: $1.5 billion; Price-to-sales ratio: 3.0; SI Rating: Average) provides residential mortgages and credit cards to borrowers who do not meet the stricter criteria of traditional banks. Its customers include the self-employed and immigrants with limited credit history. Despite its focus on riskier borrowers, Home Capital’s screening process keeps its loan losses manageable. Even so, bad loans rose to 1.2% of its total loans in the third quarter of 2009 from 0.7% a year earlier. However, that’s an improvement over 1.3% in the previous quarter. In the three months ended September 30, 2009, Home Capital’s earnings rose 36.9%, to $38.2 million, or $1.10 a share. A year earlier, the company earned $27.9 million, or $0.81 a share. Revenue rose 7.1%, to $125.3 million from $117.0 million....
Oil prices fell from their July 2008 peak of $148 U.S. a barrel to just under $40 U.S. in February 2009. Prices have roughly doubled since then, but it’s unlikely they will soon surpass last year’s highs. Still, oil is a good hedge against inflation. We feel that the best way to cut your risk in the volatile resource sector is through well-established oil producers like these three. Their large reserves should last decades. Moreover, they focus on politically stable North America. SUNCOR ENERGY INC. $37 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.6 billion; Market cap: $59.2 billion; Price-to-sales ratio: 1.7; SI Rating: Average) is Canada’s largest oil producer following its purchase of Petro-Canada on August 1, 2009. Petro-Canada shareholders received 1.28 Suncor common shares for each Petro-Canada share they held....
TELUS CORP. (Toronto symbols T $33 and T.A $31; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 318 million; Market cap: $10.2 billion; Price-to-sales ratio: 1.1; SI Rating: Above Average) earned $280 million in the three months ended September 30, 2009. That’s down 2.1% from $286 million a year earlier. Earnings per share fell 1.1%, to $0.88 from $0.89, on fewer shares outstanding. Revenue fell 1.6%, to $2.41 billion from $2.45 billion. Higher demand for data services, such as accessing email and web sites, continues to lift revenue at Telus’s wireless division, which accounts for roughly half of the company’s revenue. That helped offset falling revenue at its traditional telephone business, which provides the remaining half of Telus’s revenue. Telus’s wireless revenue should get a further boost now that the company is selling the hugely popular Apple iPhone smartphone. As well, Telus is attracting new customers with its Telus TV service, which uses high-speed Internet technology to transmit signals over existing telephone wires. The company continues to pay quarterly dividends of $0.475 a share, for an annualized yield of 5.8% (6.1% for the non-voting “A” shares). Telus has also improved its dividend reinvestment plan. Common and non-voting shareholders can now reinvest their dividends for new non-voting shares at a 3% discount to the market price. Previously, Telus did not offer a discount....
SNC-LAVALIN GROUP INC. $49 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.1 million; Market cap: $7.4 billion; Price-to-sales ratio: 1.1; SI Rating: Average) earned $0.68 a share in the three months ended September 30, 2009. That’s up 13.3% from $0.60 a year earlier. Higher profits from certain engineering and construction projects were the main reason for the gain. However, revenue fell 15.6%, to $1.4 billion from $1.7 billion. That’s mainly because of a slowdown in big new construction projects because of the weak economy. As well, overseas markets account for about 40% of SNC’s revenue. That makes it more vulnerable to the rising Canadian dollar. SNC-Lavalin is a hold.
TECK RESOURCES LTD. $34 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 588.7 million; Market cap: $20.0 billion; Price-to-sales ratio: 2.3; SI Rating: Extra Risk) is a leading producer of metallurgical coal, a key ingredient in steelmaking. It also mines copper, zinc, lead, gold, silver, molybdenum and other metals. The company continues to lower its debt following its $13.6-billion purchase of Fording Canadian Coal Trust last year. It has already repaid a $5.8 billion U.S. bridge loan, and $1.3 billion U.S. of a $4-billion U.S. term loan. As a result, Teck’s long-term debt is now $7.6 billion (Canadian), or a manageable 38% of its market cap. The company holds cash of $1.1 billion, or $1.84 a share....
Warren Buffett’s Berkshire Hathaway recently offered $44 billion U.S. for 77% of U.S.-based railway Burlington Northern Santa Fe. (Berkshire already owns 23%.) This lifted the shares of other big railways, including CN and CP. Despite the jump, both still trade at reasonable multiples of their earnings. As well, both are cutting costs. This will help their earnings grow as the economy recovers. CANADIAN NATIONAL RAILWAY CO. $57 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 470.1 million; Market cap: $26.8 billion; Price-to-sales ratio: 3.5; SI Rating: Above Average) operates the largest freight-rail network in Canada. It also serves 16 U.S. states. The recession continues to hurt demand for rail service. CN’s earnings fell 12.7% in the third quarter of 2009, to $446 million from $511 million a year earlier. Earnings per share fell 12.1%, to $0.94 from $1.07. These figures exclude unusual items, mainly income-tax recoveries to reflect adjustments made to prior years. As well, CN gets half of its revenue from its U.S. operations, so the U.S. dollar’s rise since last year added $0.03 a share to its latest earnings. Revenue fell 18.3%, to $1.8 billion from $2.3 billion....