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
CAE INC. $8.75 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 255.6 million; Market cap: $2.2 billion; Price-to-sales ratio: 1.4; SI Rating: Average) recently won $55 million of orders for new flight simulators from several new customers, including Malaysia Airlines, Kenya Airways and New Zealand’s Mount Cook Airlines. CAE has sold 10 flight simulators in its current fiscal year, which ends March 31, 2010. It’s now halfway to its forecast of 20 simulators. CAE also announced $75 million in new military-related contracts. These deals are small in relation to CAE’s $1.7 billion of annual revenue. But the company’s strong reputation should continue to help it attract new business. CAE is a buy.
LOBLAW COMPANIES LTD. $30 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 274.2 million; Market cap: $8.2 billion; Price-to-sales ratio: 0.3; SI Rating: Above Average) continues to expand its “Joe Fresh” line of low-cost clothing and fashion accessories. The company generally sells these products at its larger, warehouse-type stores, which have more room for clothing and general merchandise than its regular supermarkets. Earlier this year, Loblaw starting selling Joe Fresh cosmetics. The company recently launched Joe Fresh Bath, a new line of personal-care products, such as bath lotions and hand soaps. Private brands like Joe Fresh and President’s Choice give Loblaw an advantage in Canada’s highly competitive food-retailing market. The company feels Joe Fresh will eventually contribute $1 billion to its annual sales of over $30 billion....
ANDREW PELLER LTD. $8.36 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.9 million; Market cap: $124.6 million; Price-to-sales ratio: 0.5; SI Rating: Above Average) will sell its Granville Island craft-brewing subsidiary to Molson Coors Canada for an undisclosed sum. The sale will close in early 2010, and will let Peller focus on its main business — its wineries in Ontario, Nova Scotia and B.C. Meanwhile, the company earned $1.8 million, or $0.12 a share, in its second quarter, which ended September 30, 2009. That’s down 15.5% from $2.1 million, or $0.14 a share, a year earlier. If you disregard non-cash gains and losses on the hedging contracts the company uses to cut its exposure to foreign-exchange and interest rates, earnings would have dropped 40.7%, to $1.6 million from $2.7 million. However, sales rose 1.8%, to $67 million from $65.8 million. The company recently launched new low-priced and premium wines. These should continue to spur sales. Andrew Peller is a buy.
TIM HORTONS INC. $31 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 180.7 million; Market cap: $5.6 billion; Price-to-sales ratio: 2.5; SI Rating: Average) is one of Canada’s largest fast-food restaurant chains. Its 2,971 outlets mainly serve coffee and donuts. It also has 556 stores in the U.S., mostly near the Canadian border. Franchisees own 99% of the company’s outlets. Tim Hortons was a wholly owned subsidiary of U.S.-based Wendy’s International Inc. (now part of Wendy’s/Arby’s Group Inc., New York symbol WEN) until March 2006. That’s when it completed an initial public offering of common shares at $27.00 each. In September 2006, Wendy’s handed out its remaining 82.75% stake to its own shareholders as a special dividend.
Lower taxes lure Tim’s north
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MOLSON COORS CANADA INC. $49 continues to benefit from the cost savings generated by last year’s merger of its U.S. brewing operations with those of SABMiller. These savings should continue to help Molson Coors increase its earnings in the face of weak beer sales. Best Buy. BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $27 is closing most of its 16 customer-support call centres in Atlantic Canada and merging them into five main centres. This move will cost $13 million, but it should improve Bell Aliant’s efficiency. The fund earned $98.8 million, or $0.62 a unit, in the third quarter. Buy. EMERA INC. $23 reported that its third-quarter earnings rose 40.9%. The gain was partly due to last July’s start up of the Brunswick Pipeline, which pumps natural gas from a liquefied natural gas plant in Saint John, New Brunswick, to markets in New England and Atlantic Canada. Buy.
AGRIUM INC., $53.94, Toronto symbol AGU, has raised its takeover offer for U.S.-based fertilizer maker CF Industries Holdings Inc. (New York symbol CF). CF shareholders will still receive one Agrium common share for each CF share they own. But they will also get $45.00 in cash, up from $40.00 under the old bid (all amounts except Agrium’s share price in U.S. dollars). This new offer expires November 18. Using current prices, Agrium’s offer is worth $95.50 per CF share (or a total of $4.6 billion). However, CF is trading at $79.02, or 17.3% below Agrium’s offer....
RIOCAN REAL ESTATE INVESTMENT TRUST, $18.34, Toronto symbol REI.UN, announced its first expansion into the U.S. this week. The trust has formed a joint venture with Cedar Shopping Centers, Inc. (New York symbol CDR). Cedar owns shopping centres in northeastern and mid-Atlantic regions of the U.S. The new joint venture will hold seven of Cedar’s malls in Massachusetts, Pennsylvania and Connecticut. RioCan will own 80% of this new company. It will also receive common shares and warrants in Cedar. Exercising these warrants would give RioCan a 15% stake in Cedar....
POTASH CORP. OF SASKATCHEWAN, $105.95, Toronto symbol POT, rose 3% this week on speculation that Australia-based BHP Billiton plc (New York symbol BHP) may try to buy the company. BHP is the world’s largest mining company, and a recommendation of our Wall Street Stock Forecaster newsletter. BHP is developing a potash mine near Potash Corp.’s operations in Saskatchewan, so combining these would offer some cost-cutting opportunities. Moreover, potash prices are low right now, so it would make some sense for BHP to make an offer. That’s not reason enough to buy shares of Potash Corp., but it adds to their appeal. Meanwhile, Potash Corp. earned $0.82 a share in the three months ended September 30, 2009 (all amounts except share price in U.S. dollars). That’s down 79.1% from $3.93 a year earlier. Sales fell 64.1%, to $1.1 billion from $3.1 billion....
CANADIAN TIRE CORP., $58.37, Toronto symbol CTC.A, will sell its mortgage portfolio to National Bank of Canada for close to its book value of $167 million. When the deal closes in the fourth quarter of 2009, it will generate a $6-million pre-tax charge for the retailer. To put this in context, Canadian Tire earned $103.0 million, or $1.26 a share, in the second quarter, excluding unusual items. Getting out of the mortgage business should lower Canadian Tire’s risk. It will also help the company focus on expanding its Canadian Tire Financial Services division, which offers high-interest savings accounts, guaranteed investment certificates, tax-free savings accounts and credit cards. This business has accumulated over $2.1 billion in deposits since Canadian Tire launched it in 2006....
TRANSALTA CORP., $21.86, Toronto symbol TA, will pay roughly $755 million, or $5.25 a share, for Canadian Hydro Developers Inc. (Toronto symbol KHD). The purchase price is 15.4% higher than TransAlta’s earlier offer of $4.55 a share. Canadian Hydro is currently trading at $5.22, which indicates that investors do not expect a better offer. TransAlta aims to complete the purchase in the next month or two, once Canadian Hydro shareholders approve the takeover. TransAlta will also assume Canadian Hydro’s $876-million debt. To put these figures in context, TransAlta’s 2008 cash flow was $828 million, or $4.16 a share....