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
MDS INC., $5.36, Toronto symbol MDS, gets all of its medical isotopes from the 52-year-old Chalk River nuclear reactor near Ottawa. The reactor was shut down this week after its operator, Atomic Energy of Canada Ltd., discovered a water leak. (Water helps stabilize the nuclear fission process.) Atomic Energy estimates that it will take at least a month to repair the leak. MDS makes over half of its earnings by selling isotopes to medical labs, which use them to detect and treat cancer and other diseases. The company estimates that a prolonged outage will cut its gross earnings by $4 million a month (all amounts except share price in U.S. dollars). MDS earned $2 million, or $0.02 a share, in the three months ended January 31, 2009....
AGRIUM INC., $56.82, Toronto symbol AGU, has increased the value of its hostile takeover offer for U.S.-based fertilizer producer CF Industries Holdings (New York symbol CF). This is the second time Agrium has raised its bid. Agrium is now offering $40 per CF share in cash (all amounts except Agrium’s share price in U.S. dollars), plus one Agrium common share. This raises the offer’s cash component by $5. Overall, the new offer is worth $4.2 billion, or 3.2 times Agrium’s 2008 earnings of $1.3 billion, or $8.34 a share. Agrium has a long history of growing through acquisitions, which increases its risk. Still, CF has appeal, as it would triple Agrium’s phosphate and UAN (urea and ammonium nitrate) fertilizer-production capacity. Developing countries, such as China, Brazil and India, will need fertilizer to increase crop yields as their populations grow. Moreover, fertilizer prices are low, and Agrium’s management believes that expanding now will put the company in a good position to profit when they rise again....
Bombardier makes most of its money from its airplane operations. This is a highly cyclical industry, and the recession has hurt demand for new planes. That’s mainly why Bombardier’s shares are down over 50% from last June’s peak of around $9. However, Bombardier’s passenger-railcar business, while not as profitable, adds stability. The long-term outlook for this division remains bright, particularly as more people move to cities and governments increase spending on public-transit systems. BOMBARDIER INC. (Toronto symbols BBD.A $3.78 and...
Investor response to bad economic news often seems like an allergic reaction to a bee sting. Many investors take each new tidbit of economic news as the sure sign of an ominous new trend. But in fact, there’s a large random element in the economic news. Economic statistics vary between one reporting period and the next, due to a variety of unrelated matters: the weather, what’s on TV and the news, and so on. Adjustments of previous data reports are frequent and often large. Then too, there is a ‘flavour of the week’ aspect to economic news reporting. Virtually every day brings an abundance of economic data. The media can only report on a series of slivers of that data....
With bonds yielding just 2% to 3%, we believe that income-seeking investors are better off sticking with high-quality utility stocks, such as these four electricity generators. All have consistently posted strong earnings, and have long histories of raising their dividends. Unlike bond-interest payments, which are taxed as regular income, their dividends qualify for the dividend tax credit. They also have greater capital-gains potential. TRANSALTA CORP. $20 (Toronto symbol TA; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 197.8 million; Market cap: $4 billion; Price-to-sales ratio: 1.3; SI Rating: Average) operates over 50 electrical-power plants in Canada, the United States and Australia. TransAlta uses coal to generate 60% of its electricity, and owns three coal mines (two in Alberta and one in Washington State). This helps keep its costs down. Natural gas fuels 30% of the company’s electricity production, and hydroelectric and other sources account for 10%....
TRANSCANADA CORP. $30 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 619 million; Market cap: $18.6 billion; Price-to-sales ratio: 2.0; SI Rating: Above Average) has won a $320-million U.S. contract to build, own and operate a 310-kilometre natural-gas pipeline in Mexico. (It already owns a 130-kilometre gas pipeline in the country.) To put this in context, TransCanada earned $343 million (Canadian), or $0.55 a share in the first quarter of 2009. TransCanada has a 25-year contract to use the new pipeline to supply fuel to two power plants owned by Mexico’s state-owned electric company. It should begin operating in March 2011. TransCanada is a buy.
CAE INC. $7.25 (Toronto symbol CAE; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 254.9 million; Market cap: $1.8 billion; Price-to-sales ratio: 1.3; SI Rating: Average) makes flight simulators and trains commercial and military pilots. During its fiscal year ended March 31, 2009, CAE won $1.1 billion in military-related contracts, up 47% from the previous year. This is a new company record. CAE gets about 45% of its revenue and earnings from its military operations. This reduces its exposure to the airline industry, which has been struggling lately. CAE is a buy.
AGRIUM INC. $52 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 157 million; Market cap: $8.2 billion; Price-to-sales ratio: 0.8; SI Rating: Average) makes fertilizers from natural gas, mainly at five facilities in North America. It also owns 50% of a plant in Argentina. This business supplies 45% of its revenue, but 70% of its earnings. Most of Agrium’s remaining revenue and earnings comes from its 872 agricultural-products stores in the U.S., Argentina and Chile. Steady revenues from these retail outlets help cut company’s exposure to sometimes volatile fertilizer prices. Agrium earned $7 million, or $0.04 a share, before unusual items in the three months ended March 31, 2009. (all amounts except share price and market cap in U.S. dollars). It earned $195 million, or $1.23 a share a year earlier. The earnings drop was mainly due to unusually wet and cold weather in the U.S., which prompted farmers to delay spreading fertilizer and planting new crops....
PRECISION DRILLING TRUST, $5.84 (Toronto symbol PD.UN; Aggressive Growth Portfolio, Resources sector; Units outstanding: 241.2 million; Market cap: $1.4 billion; Price-to-sales ratio: 0.7; SI Rating: Extra Risk) provides contract-drilling services in Canada and the United States through a fleet of 380 rigs. Precision is raising cash to pay down debt related to last December’s $2-billion purchase Grey Wolf Inc., which operates 123 rigs in the U.S. To this end, Precision sold $280 million worth of new units and notes to the Alberta Investment Management Corporation (AIMCo) in April 2009. AIMCo is a crown corporation that manages Alberta’s public-sector pension plans and other special funds. The deal gives AIMCo 15% of the trust. Precision plans to raise an additional $103 million by selling new units to its existing investors....
SHAWCOR LTD. $21 (Toronto symbol SCL.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 71.3 million; Market cap: $1.5 billion; Price-to-sales ratio: 1.1; SI Rating: Average) will pay a special dividend of $0.26 on May 29, 2009. It has also increased its regular quarterly dividend by 7.7%, to $0.07 a share from $0.065. The new annual rate of $0.28 yields 1.3%. In the first quarter of 2009, earnings rose 21.6%, to $0.45 a share from $0.37 a year earlier, partly due to cost controls. Revenue rose 4.8%, to $307.5 million from $293.4 million. ShawCor prices most of its pipeline-coating contracts in U.S. dollars, and the lower Canadian dollar added $26.9 million to the company’s revenue. ShawCor is a buy.