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.
[text_ad]
Read More
Close
Dividend Stocks Library Archive
CGI GROUP INC. $13 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 306 million; Market cap: $4 billion; Price-to-sales ratio: 1.0; SI Rating: Extra Risk) is Canada’s largest provider of computer-outsourcing services. CGI helps corporations and government agencies automate certain routine functions, such as accounting and buying supplies. This lets its clients focus on their main businesses, and improve their efficiency. The company has over 100 offices in 16 countries. Canada accounts for roughly 60% of its revenue, followed by the U.S. (35%) and Europe (5%). BCE Inc. (Toronto symbol BCE) is CGI’s largest client, supplying roughly 12% of its annual revenue.
Long-term contracts cut CGI’s risk
...
TIM HORTONS INC. $30 has finished shifting its incorporation to Canada from the U.S. This will let the coffee-and-donut store operator take advantage of Canada’s lower corporate tax rates. Corporate tax rates in the U.S. are over 30%, while Canada’s combined federal and provincial rate will be around 25% in two years. Shareholders will continue to own the same number of shares and have the same interest in the company that they have now. As well, Tim Hortons’ shares will continue to trade on both Toronto and New York under the “THI” symbol. Best Buy. THE WESTAIM CORP. $0.35 continues to seek new business opportunities. Its main asset is its 74.7% stake in Nucryst Pharmaceuticals Corp. (Toronto symbol NCS), which has developed a silver-based substance that prevents infections in burns and other wounds. Westaim is still debt free, and holds cash of $40.2 million, or $0.43 a share. The company also has roughly $3.7 million of illiquid notes that it received last January as part of the restructuring of the asset-backed commercial paper market. Hold. TRANSCONTINENTAL INC. $12 has sold $100 million of preferred shares. Underwriters have an option to buy an additional $15 million worth. The cash will help the company pay down its $768.7-million long-term debt, which is a high 81% of its market cap. Buy.
PENGROWTH ENERGY TRUST, $10.28, Toronto symbol PGF.UN, fell 7% on Friday after it cut its monthly distribution by 30%, to $0.07 a unit from $0.10. The new annual rate of $0.84 yields 8.2%. Pengrowth wants to conserve cash to pay down its $1.4-billion long-term debt, which is equal to 50% of its $2.8-billion market cap. The distribution cut should save Pengrowth roughly $93 million a year. The trust also wants to spend more on developing its oil and natural-gas properties in western Canada. These have large, proven reserves, so there is little risk in investing in them. The extra cash will also help Pengrowth buy other nearby properties....
CGI GROUP INC., $12.78, Toronto symbol GIB.A, rose roughly 10% this week in response to computer-maker Dell Inc.’s (Nasdaq symbol DELL) friendly takeover of Perot Systems Corp. (New York symbol PER). Like Perot, CGI sells information-technology and business-process services to a wide range of clients. Dell is paying a premium of over 60% for Perot. This helped spur investor interest in other computer-outsourcing stocks, including CGI. However, insiders control 53% of CGI’s votes through multiple-voting class “B” shares. That makes a hostile takeover unlikely....
SUNCOR ENERGY INC., $38.59, Toronto symbol SU, announced this week that it is planning to sell some of its natural-gas operations. Most of these properties belonged to Petro-Canada, which Suncor bought on August 1. Natural-gas prices fell to around $2.50 U.S. per thousand cubic feet in early September, but have since rebounded to $3.78 U.S. That’s still well below their peak of $12 U.S., which they hit in July 2008. Suncor hopes to sell all of its natural-gas properties by the end of 2010, but will wait to see if gas prices keep rising before it finalizes any deals. The company is planning to invest the proceeds in its oil-sands operations, which will make up 70% of its business after it sells the natural-gas assets. Suncor’s other oil properties, as well as its refineries and gas stations, will account for the remaining 30%....
ENCANA CORP., $63.52, Toronto symbol ECA, rose 7% on Friday after the company announced that it will split itself into two separate companies. One will keep the EnCana name, and will focus on unconventional natural gas. The other will operate as Cenovus Energy Inc., and will specialize in oil-sands projects, oil refineries and conventional natural gas. The new EnCana will account for about two-thirds of the company’s current production and reserves. Cenovus will account for the remaining third. EnCana had hoped to complete the split in early 2009, but the stock-market decline and tight credit markets would have made it difficult for the two new, smaller companies to raise capital to fund new projects. Now that conditions have improved, EnCana has decided to go ahead with the split....
Real estate investment trusts (REITs) may get more attractive in the next year or so as income trusts start to disappear. Ottawa will start taxing income-trust distributions in 2011. As a result of this change, many trusts will convert to regular corporations and pay corporate taxes. That will give them less cash to distribute to shareholders. REITs will remain exempt from the income-trust tax, as long as they get most of their cash flow from properties in Canada. It’s likely that income-seekers will look to REITs to replace income trusts and provide a hedge against inflation. Real estate is a cyclical business, and rental income from the underlying properties can suddenly dry up during economic slowdowns. To cut your risk, you should focus on well-established REITs with long histories of maintaining their distributions during cyclical downturns....
SUNCOR ENERGY INC. $35 (Toronto symbol SU; Conservative Growth Portfolio, Resources sector; Shares outstanding: 1.6 billion; Market cap: $56 billion; Price-to-sales ratio: 1.0; SI Rating: Average) replaces Petro-Canada on our Conservative Growth Portfolio. On August 1, 2009, Petro-Canada shareholders received 1.28 shares of Suncor for each share they owned, while Suncor investors got one share of the new company for each Suncor share they held. The new company is now Canada’s largest oil company by market cap, and the fifth largest in North America. It has 7.5 billion barrels of proven and probable reserves. Oil sands account for about 80% of these. It also has 19 billion barrels in contingent reserves. Its daily production of 710,000 barrels of oil equivalent consists of roughly 80% oil and 20% natural gas....
Canada’s big five banks are still dealing with high loan losses, but they have enough capital to absorb them without having to issue more shares. This should also let them keep providing above-average dividend yields. ROYAL BANK OF CANADA $56 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.4 billion; Market cap: $78.4 billion; Price-to-sales ratio: 2.1; SI Rating: Above Average) is Canada’s largest bank, with total assets of $659.9 billion. In its third quarter, which ended July 31, 2009, Royal’s earnings rose 23.7%, to $1.6 billion, or $1.05 a share, from $1.3 billion, or $0.92 a share, a year earlier. Revenue rose 32.3%, to $7.8 billion from $5.9 billion....
TELUS CORP. (Toronto symbols T $34 and T.A $33; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 317.7 million; Market cap: $10.8 billion; Price-to-sales ratio: 1.1; SI Rating: Above Average) has purchased privately owned Black’s Photo Corp., which operates 113 stores that sell cameras, film and other photographic equipment. Telus plans to sell its cellphones and wireless services through Black’s. This looks like a good fit, as more consumers are using their cellphones to take pictures and videos. Adding Black’s will also help Telus compete with BCE, which recently bought consumer-electronics retailer The Source in an effort to attract new wireless customers. The company paid just $28 million for Black’s, which is equal to 11% of the $244 million, or $0.77 a share, that it earned in the three months ended June 30, 2009. Telus is a buy. The non-voting “A” shares are the better choice.