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
BANK OF NOVA SCOTIA $31.25, Toronto symbol BNS, expects to record charges totaling $595 million (after taxes) for its fourth fiscal quarter ended October 31, 2008. These charges include $370 million in writedowns of illiquid securities, $115 million of losses related to the bankruptcy of U.S. brokerage firm Lehman Brothers, and $110 million in writedowns of interest rate hedging contracts. The bank also still holds $348 million U.S. worth of securities that it may have to write down if conditions worsen. These charges are manageable considering that Bank of Nova Scotia earned $1.0 billion or $0.98 a share in the third quarter of fiscal 2008. Its main businesses are still profitable, and the bank is taking advantage of the turmoil in the financial markets to strengthen its domestic and international operations with acquisitions. Bank of Nova Scotia is a buy....
TECK COMINCO LTD. $6.35, Toronto symbol TCK.B, fell 50% this week largely due to concerns over its ability to carry a $5.8 billion U.S. short-term loan it used to finance its recent $15.0 billion U.S. takeover of Fording Canadian Coal Trust. That loan itself is now equal to roughly 2.3 times Teck’s market cap. Falling prices for zinc, copper and gold could hurt Teck’s ability to quickly repay the new debt. The company may have to cut or eliminate its $1.00 dividend, which now yields a high 15.7%. It may also have to issue new shares at depressed prices. Teck feels it can pay down a big part of this loan in 2009. It will receive a $1 billion (Canadian) tax refund on the Fording transaction. It also plans to raise cash by selling some of its operations. This could include its gold mining businesses. As well, Teck will delay capital spending on several new projects....
As I’ve said several times in the past few weeks, you can only spot a market bottom (a reversal in a falling trend in stock prices) in hindsight. Then too, a market can hit bottom, put on a healthy bounce, then go back down to the bottom once again before going on to a lasting rise. But I do feel that a lot of the risk of further decline is now out of the market. My view is that stocks are likely to move substantially higher in the next 6 months to a year, if not sooner. TERANET INCOME FUND $10.10, Toronto symbol TF.UN, has declined to comment on the new takeover offer of $10.25 a unit from the Ontario Municipal Employees Retirement System (OMERS). The new offer is 6.8% below OMERS’ original offer of $11.00 a unit. OMERS dropped its higher bid mainly due to the slowing Ontario economy and falling real estate values. That could hurt demand for Teranet’s electronic land registry services. Meanwhile, Teranet will pay a cash distribution $0.0225 a unit on November 17, 2008. This partial monthly payment will cover the period from November 1, 2008 to the expiry of the OMERS offer on November 10, 2008....
FORDING CANADIAN COAL TRUST $85 (Toronto symbol FDG.UN) continues to trade below Teck Cominco Ltd.'s takeover offer of $82.00 U.S. in cash plus 0.245 of a Teck class B subordinate voting share. The offer is now worth $97.27 per Fording unit. The deal should close on October 30, 2008. As we recommended in August, 2008, you should sell your Fording units if you hold them outside of an RRSP. If you hold them in an RRSP, you should tender your units to Teck. NORTEL NETWORKS CORP. $1.79 (Toronto symbol NT) has cut its revenue and earnings outlook for 2008, due to slowing demand for telecommunications equipment, unfavourable foreign exchange rates and delays delivering certain products. Sell from your aggressive portfolio. PENGROWTH ENERGY TRUST $11 (Toronto symbol PGF.UN) has moved down lately along with oil prices. Lower prices could prompt Pengrowth to cut its monthly distribution of $0.225 a unit (24.5% yield). Even if the trust cut the rate in half, the units would still yield over 12%. Buy for your aggressive portfolio....
One of the best ways to find bargain stocks is to look for undervalued stocks that have “hidden assets”. These are assets that attract far less investor interest that they deserve. That gives the buyers of these undervalued stocks a bargain. It may also attract takeover bids. If these hidden assets were sold, spun off, or utilized more efficiently, they could greatly increase the value of the undervalued stocks that hold them. One great example of such undervalued stocks is Torstar Corp. TORSTAR CORP. $11 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 78.9 million; Market cap: $867.9 million; SI Rating: Above average) publishes The Toronto Star, Canada’s largest daily newspaper. It also publishes other dailies and community newspapers in Southern Ontario. Newspapers account for 70% of Torstar’s total revenue. The remaining 30% comes from wholly owned subsidiary Harlequin Enterprises Ltd., the world’s largest publisher of romance novels (putting Torstar Corp. in the category of undervalued stocks)....
AGRIUM INC. $42 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 158.0 million; Market cap: $6.6 billion; SI Rating: Average) rose to $116 in June, 2008, but has dropped since due to fears that weaker corn and grain prices will hurt demand for fertilizers. The credit crisis has also made it harder for farmers to buy seed and new equipment. We still have a high opinion of Agrium’s long-term outlook. Developing countries such as China and India need fertilizers to increase crop yields as their populations grow. Agrium also plans to expand its retail operations in the United States, which cuts its reliance on bulk fertilizer sales. However, the fertilizer business is highly cyclical. A slowing economy could hurt demand for corn and grain-based fuel additives such as ethanol. Agrium is a hold.
ENCANA CORP. $52 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 750.2 million; Market cap: $39.0 billion; SI Rating; Average) plans to let shareholders vote on its plan to split itself into two companies — one focusing on natural gas, the other on oil sands and oil refineries. The gas company will keep the EnCana name, while the oil company will take the name Cenovus Energy Inc. Shareholders will receive one new share in each new company for every EnCana share they hold. Break-ups like this generally work out well for investors, as the total value of the two new stocks usually exceeds the value of the former parent company over time. EnCana got as high as $98 in May, 2008, but has moved down to its current price, mostly due to falling natural gas prices. Natural gas accounts for about 80% of EnCana’s total production. However, the company’s break-up plan and growing reserves enhance its long-term prospects....
THE WESTAIM CORP. $0.18 (Toronto symbol WED; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 94.2 million; Market cap: $17.0 million; SI Rating: Speculative) currently holds two money-losing businesses: 74.5% of Nucryst Pharmaceuticals (Toronto symbol NCS), whose medical products prevent infection in burns; and iFire Technology, which specializes in flat-panel TV displays. Westaim plans to sell iFire’s assets by the end of 2008. At June 30, 2008, Westaim held cash of $40.1 million or $0.43 a share and was debt free. Westaim now hopes to return to profitability by acquiring several construction-related businesses in Western Canada. These operations generate combined annual earnings of $10 million, on revenue of $164 million. Westaim will issue 257 million shares valued at $0.60 each to the owners of these businesses. That price is three times the current share price. It will also sell 25 million shares to private investors at the same price. If successful, current Westaim shareholders will own 25% of the new company. Westaim will also consolidate its shares on a 1-for-20 basis. Switching its focus to construction should improve Westaim’s prospects, but falling energy prices could slow the pace of new construction in Alberta over the next few years. What’s more, big share consolidations often hurt the stock price....
INDIGO BOOKS & MUSIC INC. $13 (Toronto symbol IDG; Aggressive Growth Stock Picks, Consumer sector; Shares outstanding: 24.8 million; Market cap: $322.4 million; SI Rating: Extra risk) is Canada’s largest bookseller. It operates 86 superstores under the banners Chapters, Indigo and the World’s Biggest Bookstore, and 159 small format stores, under the banners Coles, Indigo, Indigospirit, SmithBooks and The Book Company. Indigo also sells its products over the Internet. The company continues to add non-book merchandise to its stores, including consumer electronics, yoga mats, storage bins and gift cards. That helps cut Indigo’s reliance on books for growth, particularly since it has to discount top-selling titles to compete with larger retailers such as Wal-Mart. Indigo is now testing a new retailing concept. It recently opened two boutique stores in Toronto under the “Pistachio” banner. These stores feature environmentally friendly gift, paper and beauty products. If successful, the company feels it could open about 200 Pistachio stores in Canada and the United States over the next few years....
CAE INC. $6.60 (Toronto symbol CAE; Conservative Portfolio - Growth, Manufacturing & Industry sector; Shares outstanding: 254.9 million; Market cap: $1.9 billion; SI Rating: Average) is a leading maker of flight simulators. It also operates pilot-training facilities. CAE’s shares have fallen from a recent peak of $14 in June 2008, largely due to fears that the credit crisis will force airlines to scale back new aircraft purchases. This, in turn, could hurt demand for new flight simulators. However, CAE gets roughly 45% of its revenue from military customers. This limits its exposure to the cyclical air travel industry. As well, demand for CAE’s pilot-training services should remain strong because many pilots are approaching retirement age, and demand for new pilots will rapidly expand when the economy improves....