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
PRECISION DRILLING TRUST $8.81, Toronto symbol PD.UN, has completed its acquisition of U.S.-based contract driller Grey Wolf Inc. The trust paid roughly $1.15 billion in cash and $250 million in new units for Grey Wolf. Precision finalized the terms of the Grey Wolf takeover in August, 2008. Since then, the price of Precision’s units has dropped 60%, mostly due to a 70% drop in oil prices, from $120 U.S. a barrel to $40 U.S. The drop in oil and natural gas prices prompted many producers to cut spending on new exploration in 2009, which hurts Precision’s profit outlook. Precision’s market cap is now just $1.1 billion, which is 21% below the $1.4 billion that it paid for Grey Wolf. Precision also needed to arrange $1.6 billion U.S. in new credit facilities to buy Grey Wolf. That greatly increased its long-term debt, which was $231.8 million (Canadian) at September 30, 2008. To help free up cash for debt repayments, Precision has now cut its monthly cash distributions by 69.2%, from $0.13 a unit to $0.04. The new annual rate of $0.48 yields 5.4%....
TORONTO-DOMINION BANK $43 (Toronto symbol TD) earned $3.8 billion in its fiscal year ended October 31, 2008, down 9.0% from $4.2 billion in the prior year. Earnings per share fell 15.1%, to $4.88 from $5.75, on fewer shares outstanding. These figures exclude several nonrecurring items, such as integration costs of acquisitions. The drop was largely due to higher loan loss provisions, which grew 48.4% to $1.05 billion from $705 million. TD recently sold $1.4 billion worth of new common shares. That strengthened its regulatory capital ratios. Buy. IGM FINANCIAL INC. $31 (Toronto symbol IGM) reported that its assets under management fell 17.0%, to $102.2 billion at November 30, 2008 from $123.2 billion a year earlier. The drop was largely due to falling stock markets, plus net redemptions — including $103.7 million in November, 2008. However, IGM’s decline was less than the roughly 21% drop in assets under management for the entire Canadian mutual fund industry. Best Buy. MAPLE LEAF FOODS INC. $11 (Toronto symbol MFI) has issued $70 million of warrants (6% of its market cap). The cash will help it cover the costs of its recent recall of meat products due to listeria contamination. Buy.
THOMSON REUTERS CORP. $33 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 824.3 million; Market cap: $27.2 billion; SI Rating: Above average) divides its operations into two divisions: Markets (60% of revenue), which provides financial information products to banks and other financial institutions; and Professional (40%), which sells specialized information to professionals in the legal, accounting, scientific and healthcare fields. The company took its present form on April 17, 2008 when The Thomson Corp. (old symbol TOC) acquired UK-based information provider Reuters Group plc.
Electronic focus a plus
The company sells 90% of its products electronically. That cuts its printing and postage costs. Selling information products electronically also makes it easier to expand to new markets such as Latin America and Asia. The Americas region provides 60% of Thomson Reuters’ revenue, followed by Europe (30%) and Asia (10%)....
TORSTAR CORP. $7.85 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 78.9 million; Market cap: $619.4 million; SI Rating: Above average) lost $0.03 a share (total $2.7 million) in the three months ended September 30, 2008, compared with a profit of $0.11 a share ($8.4 million) year earlier. If you exclude restructuring costs and the writedown of an investment, Torstar would have earned $0.20 a share in the latest quarter. There were no such items in the year-earlier quarter. Revenue grew 0.8%, to $372.1 million from $369.2 million. Higher revenue at the company’s Harlequin book publishing subsidiary and Internet operations helped offset lower advertising revenue at Torstar’s newspapers. Positive currency exchange rates also contributed to the higher revenue. Torstar’s latest restructuring should save it $18 million a year. That should help it cope with the current ad slump. The company could also unlock some of its value by spinning off or selling some of its businesses such as Harlequin, or its 20% stake in the private company that owns CTV Television and other media properties. Torstar is a buy.
Tim Hortons now aims to improve the profitability of its U.S. division, which accounts for 8% of its sales.
SNC-LAVALIN GROUP INC. $38 (Toronto symbol SNC; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 150.7 million; Market cap: $5.7 billion; SI Rating: Average) designs and builds a variety of large-scale projects, such as roads, bridges and electrical power systems. In the three months ended September 30, 2008, earnings rose 46.3%, to $0.60 a share from $0.41 a year earlier. Most of that gain came from its mining and infrastructure divisions. However, revenue fell 5.6%, to $1.7 billion from $1.8 billion, due to problems at a new power plant near Toronto. SNC’s revenue could continue to suffer as the credit crisis could make it difficult for companies to finance big new engineering projects. Engineering and construction projects are also cyclical, and it looks like we’re approaching the end of the current economic cycle. At 18.7 times its likely 2008 earnings of $2.03 a share, SNC is particularly vulnerable to a slowing economy in North America, which accounts for 60% of its total revenue. SNC-Lavalin is still a hold.
Home Capital Group has dropped sharply in the past few months, largely due to the worldwide credit crisis. However, the company continues to profit from the niche markets it operates in. Its recent expansion into more traditional lending also broadens its customer base. As well, Home Capital has no exposure to the housing problems in the United States. HOME CAPITAL GROUP INC. $17 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.5 million; Market cap; $586.5 million; SI Rating: Extra risk) is the parent company of Home Trust Company, a federally regulated trust company that specializes in residential first mortgages to small business owners, the self-employed and others who don’t meet the stricter criteria of larger, traditional lenders. Home Capital recently began offering traditional mortgages. While that puts it in direct competition with the big banks, Home Capital feels this move will strengthen its position among mortgage brokers....
CANADIAN TIRE CORP. $41 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.5 million; Market cap: $3.3 billion; SI Rating: Above average) operates 473 stores that sell automotive, household and sporting goods. It also operates 82 PartSource stores (auto parts), 364 Mark’s Work Wearhouse stores (casual clothing) and 269 gas stations. The company continues to profit from its ongoing plan to make its stores more appealing to shoppers, including wider aisles, better signage and lighting. In the three months ended September 27, 2008, earnings per share rose 12.7%, to $1.42 from $1.26 a year earlier. These figures exclude unusual items. Revenue grew 10.2%, to $2.3 billion from $2.05 billion. Same-store sales rose 2.0%, mainly due to strong demand for winter merchandise. Canadian Tire aims to build on the success of these new stores. It’s now testing several new store formats. These include the “Smart” store, which features more customer help desks and other ways to help shoppers quickly find what they want....
SHAWCOR LTD. $16 (Toronto symbol SCL.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 70.6 million; Market cap: $1.1 billion; SI Rating: Average) has dropped 60% since hitting an all-time high of $40 in October, 2007. ShawCor makes sealants that protect onshore and offshore oil and natural gas pipelines from corrosion, so it’s vulnerable to volatile energy prices. Overseas customers supply 75% of its revenue, so it’s also vulnerable to currency exchange rates. Still, the company continues to win new contracts thanks to its strong reputation in this niche industry. ShawCor’s earnings in the third quarter of 2008 rose 9.5%, to $0.46 a share from $0.42 a year earlier. Revenue grew 34.9%, to $357.2 million from $264.9 million. ShawCor is a buy.
NOVA CHEMICALS CORP. $5.44 (Toronto symbol NCX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 83.2 million; Market cap: $452.6 million; SI Rating: Extra risk) expects to spend $160 million U.S. on capital upgrades in 2008, down from its original target of up to $225 million U.S. It will also cut its 2009 spending by $100 million U.S. Nova makes a variety of plastic products for the struggling automotive, building and construction industries. Conserving cash by cutting capital spending will help it cope with the current downturn. As well, Nova’s heavy use of natural gas from Alberta gives it a cost advantage over its main competitors in the U.S. Gulf Coast region, which rely on more expensive crude oil. Nova Chemicals is still a buy.