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
Oil prices have dropped from $148 U.S. a barrel in July, 2008 to its current price of around $44 U.S. That has prompted oil companies to delay big investments in Alberta’s oil sands until conditions improve. Still, oil sands projects have huge long-term potential, and will provide decades of growth for Imperial Oil, EnCana and Petro-Canada. Companies such as Finning International that supply equipment and services to oil sands operators should also see huge gains. All four of these companies have moved down lately, but we still see them as buys for long-term gains....
TELUS CORP. (Toronto symbols T $36 and T.A $33; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 317.8 million; Market cap: $11.4 billion; SI Rating: Above average) had considered acquiring BCE before BCE accepted the offer from the Ontario Teachers’ Pension Plan. Even though the BCE privatization has failed, Telus will probably not launch a new takeover offer. That’s mainly because the credit crisis would make it difficult for Telus to borrow the cash it would need. Telus may instead try to merge its wireless operations with those of BCE into 50-50 joint venture. There is little geographic overlap between the two systems, so a partnership with BCE would probably win regulatory approval. Combining the technical and marketing operations could also lead to substantial cost savings. Lower costs would help the combined operation compete with new companies that plan to enter Canada’s wireless market in 2009. Telus is a buy. The cheaper, non-voting ‘A’ shares are the better choice.
Conservative investors have little need to dabble in risky stocks these days, since many conservative favourites are unduly cheap. BCE Inc. plunged last month after its $42.75 takeover by a private consortium fell through. That happened because BCE failed the ‘solvency test’, which was a condition of the deal. Analysis showed that, post-takeover, BCE’s tangible assets (that is, excluding goodwill or ‘value-as-a-going-concern’) would fall short of BCE’s post-takeover debt of $43 billion. This was mainly because of the plunge in stock-market values since the deal’s June, 2007 signing, near the market peak....
We continued to recommend BCE for the past year and a half, despite the risk that its $42.75 takeover might fall through due to the developing credit crisis and bear market. That’s because, either way, we felt BCE still offered an attractive investment opportunity. Now that the possibility of a takeover (at a price anywhere near $42.75) has ended, BCE seems unduly depressed. This partly reflects dumping by traders who only held the stock because they wanted to profit from the takeover. It may also be partly due to a misunderstanding by some investors of BCE’s financial situation. Even without the likelihood of a takeover, BCE still has strong appeal. Its businesses continue to generate steady cash flows. A new restructuring plan will also give BCE more cash to invest in its high-growth operations, particularly wireless and high-speed Internet access. BCE could also unlock some of its value by spinning off or selling some of its operations....
MAPLE LEAF FOODS INC. $10.75, Toronto symbol MFI, has agreed to settle several class action lawsuits stemming from this summer’s listeria outbreak at its Toronto meat-processing plant. The settlement will cost the company between $25 million and $27 million. To put that in perspective, Maple Leaf lost $12.9 million or $0.10 a share in the three months ended September 30, 2008, mainly due to the costs to recall the contaminated products and improve food safety at all of its plants. If you disregard these costs, Maple Leaf would have earned $0.13 a share in the third quarter. Maple Leaf’s stock is up nearly 65% since it fell to $6.54 in October, 2008, thanks to its quick response to this crisis. The settlement of these class-action lawsuits will now let Maple Leaf focus on rebuilding consumer confidence in its products....
BCE INC. $21.23, Toronto symbol BCE, has confirmed that its $42.75-a-share takeover by a private consortium led by the Ontario Teachers’ Pension Plan will not proceed. The deal required auditing firm KPMG to provide an opinion on BCE’s solvency following the takeover. KPMG concluded that BCE would fail this test. BCE disagreed with KPMG’s assessment, and hired a second auditing firm, PricewaterhouseCoopers, to help it address specific items in KPMG’s report. However, KPMG did not change its opinion, and the deal died....
BANK OF NOVA SCOTIA $33.65, Toronto symbol BNS, recently agreed to buy Sun Life Financial’s 37% stake in CI Financial Income Fund, Canada’s third-largest mutual fund company. The purchase will give the bank about 37.6% of CI’s outstanding units. Bank of Nova Scotia originally agreed to pay $2.3 billion in cash for the CI units. Under a new agreement, the bank will now pay $1.55 billion in cash, $500 million in common shares valued at $34.60 a share and $250 million in preferred shares. This new arrangement helps preserve Bank of Nova Scotia’s strong regulatory capital ratios. The bank aims to complete the purchase next week. Meanwhile, Bank of Nova Scotia’s revenue in its fiscal year ended October 31, 2008 fell 4.9%, to $11.9 billion from $12.5 billion in the prior year. It earned $3.1 billion or $3.05 a share, down 22.4% from $4.05 billion or $4.01 a share. However, if you disregard writedowns of securities, earnings per share would have fallen 3.5% to $3.87....
EMERA INC. $21 (Toronto symbol EMA) earned $0.05 a share in the three months ended September 30, 2008, down 86.5% from $0.37 a year earlier. If you disregard a writedown and one-time costs, Emera would have earned $0.22 a share in the most recent quarter. The drop was mainly due to higher fuel costs at its main subsidiary, Nova Scotia Power. Revenue fell 4.7%, to $295.8 million from $310.3 million. However, high power rates should expand revenue in 2009. Buy. TELUS CORP. $37 (Toronto symbol T.A) estimates that it will spend $50 million on restructuring activities in 2008. That’s up from its earlier estimate of $30 million. To put these costs in perspective, Telus earned $0.89 a share (total $285.1 million) in the third quarter of 2008. However, improving its efficiency will help Telus compete with new entrants in the wireless field. Buy. GREAT-WEST LIFECO INC. $27 (Toronto symbol GWO) earned $0.48 a share in the third quarter of 2008, down 5.9% from $0.51 a year earlier. The drop was mainly due to unusual charges at its U.S. mutual fund subsidiary, Putnam Investment Trust. Despite the recent market turmoil, Great-West remains well capitalized. Best Buy.
CGI GROUP INC. $9.00 (Toronto symbol GIB.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 308.4 million; Market cap: $2.8 billion; SI Rating: Extra risk) provides information technology and businessprocess services to a wide range of business and government clients. The company has over 100 offices in 16 countries. However, North America accounts for 92% of its revenue. Most outsourcing contracts run from 5 to 10 years. That gives CGI steady, predictable revenue streams. Long-term contracts also give CGI time to build close relationships with its clients. That helps it retain those clients, and sell them more services. CGI’s revenue grew from $3.2 billion in 2004 to $3.7 billion in 2008 (fiscal years end September 30). Earnings rose from $0.44 a share (total $185.4 million) in 2004 to $0.92 a share ($297.9 million) in 2008. However, the 2008 earnings included $26.6 million in unusual income tax gains....
CANADIAN TIRE CORP. $43 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.5 million; Market cap: $3.5 billion; SI Rating: Above average) plans to start selling grocery items such as milk, bread and frozen meals at two of its Ontario stores, on a trial basis. The grocery business is highly price competitive. Food also has a much shorter shelf life than Canadian Tire’s traditional merchandise of automotive products, household items and sporting goods. So replenishing food items could be a challenge. However, the company feels that selling food will help encourage repeat visits and expand sales. If this test is successful, it should also help Canadian Tire compete with grocery stores that have expanded their selection of general merchandise....