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
Canadian Tire has risen 50% from a low of $36.56 last November. That’s mainly because the company is benefiting from its innovative new store designs, which include wider aisles and better lighting. It has also done a good job of managing its financing division during the credit crisis. Moreover, it is making better use of one of its most underappreciated assets — roughly $2 billion in real estate. CANADIAN TIRE CORP. $50 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.6 million; Market cap: $4.1 billion; Price-to-sales ratio: 0.5; SI Rating: Above Average) operates 476 stores that sell automotive, household and sporting goods. These account for around 60% of the company’s revenue, and 45% of its earnings. Canadian Tire also owns other retail chains, including 374 Mark’s Work Wearhouse casual-clothing stores, 274 gas stations (many have car washes and convenience stores) and 87 Part-Source auto-parts stores. Mainly on the strength of its store renovations, Canadian Tire’s sales rose 29.2%, from $7.1 billion in 2004 to $9.1 billion in 2008....
Oil has dropped from $74 U.S. a barrel in June to $60, and could fall further. We depend on resource industries more than the U.S. does, so the drop in oil and other commodities pushed down the Canadian dollar from $0.92 U.S. in May to $0.86 today. CAE INC. $6.68 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 255.1 million; Market cap: $1.7 billion; Price-to-sales ratio: 1.0; SI Rating: Average) stands to gain from both developments. CAE makes flight simulators and operates pilot-training facilities. Lower fuel prices leave its airline customers with more cash to spend on new simulators and training. Falling oil prices cut consumer costs, leaving more funds for travel....
The recession is driving down advertising revenue for many newspaper publishers and information providers. As well, more people are turning to the Internet as their main source of information. We feel these three information providers will overcome the current downturn. As market leaders, their well-known brands and strong reputations will continue to attract customers and advertisers. As well, all three are aggressively cutting their costs. THOMSON REUTERS CORP. $32 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 828.6 million; Market cap: $26.5 billion; Price-to-sales ratio: 2.0; SI Rating: Above Average) divides its operations into two divisions: Markets accounts for 60% of the company’s revenue and sells financial-information products to banks and other financial institutions. Professional (40% of revenue) sells specialized information to professionals in the legal, accounting, scientific and health-care fields. Thomson Reuters gets about 60% of its revenue from the Americas, followed by Europe (30%) and Asia (10%)....
INDIGO BOOKS AND MUSIC INC. $13 (Toronto symbol IDG; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 24.5 million; Market cap: $318.5 million; Price-to-sales ratio: 0.3; SI Rating: Average) has started paying quarterly dividends of $0.10 a share. The annual rate of $0.40 a share yields 3.1%. Indigo is also doing a good job of increasing its sales during the recession. In its latest quarter, same-store sales rose 3.8% at its Chapters and Indigo superstores and 6.2% at its mall-based stores. That’s partly because the company has moved into non-book merchandise, such as educational toys. Indigo plans to start selling toys in all 90 of its superstores, up from 15 today. In light of its new dividend, we’ve raised Indigo’s SI Rating to “Average” from “Extra Risk.”...
CANADIAN IMPERIAL BANK OF COMMERCE $57 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 381.5 million; Market cap: $21.7 billion; Price-to-sales ratio: 1.5; SI Rating: Above Average) became the target of a $600 million class-action lawsuit in June 2007. Former and current employees accused the bank of failing to pay overtime. (CIBC lost $51 million, or $0.24 a share, in the three months ended April 30, 2009, mainly because of $743 million in writedowns.) Last month, a judge ruled that the suit did not meet the criteria for a class-action trial, though individual claims can still go ahead. Despite the ruling, the case’s high profile will probably force CIBC to change the way it manages employees. That will almost certainly increase its labour costs. However, it’s likely that other banks will also change their overtime rules to avoid similar lawsuits....
ENCANA CORP. $52 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 750.6 million; Market cap: $39 billion; Price-to-sales ratio: 1.1; SI Rating: Average) is a leading North American producer of natural gas and oil. Natural gas accounts for 80% of its production. In July 2008, gas prices shot up to around $12 per thousand cubic feet (all amounts except share price and market cap in U.S. dollars), but have fallen to around $3.38 today. The drop was partly caused by cooler spring weather. This has cut air-conditioner use, so electric utilities are burning less gas. Gas companies have also increased supplies by importing liquefied natural gas and bringing new projects into production. Like many resource companies, EnCana uses hedging contracts to lock in its selling price for natural gas. These help shield it from changing prices. The company has hedged two-thirds of its natural-gas production at an average price of $9.13 through October....
The recession continues to drive down railway volumes and stock prices. However, both CN and CP have been cutting costs, which will help them increase their profits once the economy starts growing again. As well, both recently made acquisitions in the U.S. that should fuel their growth. CANADIAN NATIONAL RAILWAY CO. $45 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 468.4 million; Market cap: $21.1 billion; Price-to-sales ratio: 2.5; SI Rating: Above Average) operates the largest freight-rail network in Canada. It also serves 16 U.S. states. In the three months ended March 31, 2009, CN’s revenue fell 3.5%, to $1.86 billion from $1.93 billion a year earlier. The recession cut freight volumes, and CN lowered its fuel surcharges in response to the drop in oil prices. Earnings rose 0.7%, to $302 million from $300 million. Earnings per share rose 3.2%, to $0.64 from $0.62, on fewer outstanding shares. These figures exclude several one-time items, including a gain on the sale of a Toronto rail line and expenses related to CN’s recent takeover of a Chicago-area railway. Still, the company benefitted from a lower income-tax rate and a weaker Canadian dollar, which increased the contribution of its American operations....
TECK RESOURCES LTD. $18 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 486.9 million; Market cap: $8.8 billion; Price-to-sales ratio: 1.2; SI Rating: Extra Risk) will see its coal-shipping costs fall by $70 million this year following a favourable arbitration ruling over CP Rail. The two companies could not agree to a new contract, so Teck opted for arbitration. To put these savings in context, Teck earned $227 million, or $0.47 a share, in the first quarter of 2009. Separately, Teck has reached a new deal with CN Rail that will see CN ship more of Teck’s coal. Being able to use both CP and CN should help Teck improve its efficiency. Teck Resources is a buy.
AGRIUM INC. $43 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 157 million; Market cap: $6.6 billion; Price-to-sales ratio: 0.5; SI Rating: Average) is working on a plan to capture carbon dioxide released from its fertilizer plant near Edmonton. The company wants to ship the reclaimed carbon to oil producers, who would pump it into underground deposits to extract more oil. Selling its excess carbon would give Agrium another source of revenue. This year, the Alberta government will allocate $100 million to three carbon-capture proposals, including Agrium’s project. It did not say how much each would receive. However, it will probably take Agrium several years to perfect this technology. Agrium is a hold.
MDS INC. $6.06 (Toronto symbol MDS; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 120.1 million; Market cap: $727.8 million; Price-to-sales ratio: 0.4; SI Rating: Average) has sold one of its two late-stage drug testing businesses. The company is still looking for a buyer for the second one. To put the $50-million sale price in perspective, MDS lost $17 million, or $0.15 a share, in the three months ended April 30, 2009 (all amounts except share price and market cap in U.S. dollars). The loss included a $16-million writedown of buildings and equipment at its drug-testing division. By getting out of late-stage testing, MDS will be able to focus on its more promising early-stage operations. However, the company’s medical-isotope business continues to suffer from the closure of the Chalk River reactor near Ottawa, which will remain out of service until late 2009. MDS gets all of its isotopes from Chalk River, and the shutdown is cutting its gross earnings by $4 million a month. MDS is a hold....