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 $44 (Toronto symbol BNS; Conservative Growth Portfolio, Finance sector; Shares outstanding: 990.0 million; Market cap: $43.6 billion; SI Rating: Above average) is taking advantage of the credit crisis to expand its wealth management operations. Sun Life Financial Inc. wants more flexibility to pursue acquisitions, so it has agreed to sell its 37% stake in CI Financial Income Fund (Toronto symbol CIX.UN) to Bank of Nova Scotia. CI Financial is Canada’s third-largest mutual fund company. Following the purchase, Bank of Nova Scotia will own 37.6% of CI Financial. The $2.3 billion purchase price is equal to 2.3 times the $1.0 billion or $0.98 a share that Bank of Nova Scotia earned in the three months ended July 31, 2008. The deal should be a good one for Bank of Nova Scotia. It’s paying $22 a unit for CI. That’s more than CI’s current price of $16.80, but 33% below its record high of $32.69 in August, 2006. As one of our recommended blue chip stocks, Bank of Nova Scotia is a buy....
GREAT-WEST LIFECO INC. $28 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 894.4 million; Market cap: $25.0 billion; SI Rating: Above average) holds $101 million of fixed-income securities issued by Lehman Brothers, which declared bankruptcy in September, 2008. The company also holds $347 million of securities linked to troubled U.S.-based AIG (American International Group), plus $2.1 million of fixed-income securities of Washington Mutual Inc. Great-West will record an undisclosed charge against its third quarter earnings to reflect the decline in value of these investments. However, the company’s total exposure of $450.1 million is minimal next to its total assets of $131.3 billion, or equity of $12.4 billion. Great-West may also take advantage of the current crisis to buy promising operations at bargain prices. As one of our recommended Canadian dividend stocks, Great-West Lifeco is a buy....
Stocks in our Aggressive Portfolio, such as these four, tend to be more highly leveraged and more volatile than those in our Conservative Growth or Income-Seeking Portfolios. These four also operate in the Manufacturing sector, which is generally more risky than, say, Utilities. As well, they serve narrow markets or cyclical industries. Due to the recent stock market turmoil, many investors will consider selling stock from their aggressive portfolio. We feel you should resist the urge to sell high-quality companies, even if they are in your aggressive portfolio, just because you feel they could go lower. We still have a high opinion of these four companies from our Aggressive Portfolio, and they should all rebound strongly as the economy improves. However, only three are buys right now. GENNUM CORP. $6.65 (Toronto symbol GND; Aggressive Portfolio, Manufacturing & Industry sector; Shares outstanding: 35.6 million; Market cap: $236.7 million; SI Rating: Above average) makes equipment that lets broadcasters store, manipulate and transport video signals without losing picture quality. This business accounts for 80% of Gennum’s total sales. The remaining 20% comes from making chips that improve the speed and reliability of transmissions in computer networks....
Investing for beginners can seem like a real challenge. There are a huge number of investment options to choose from, so how do you evaluate the choices? There are three key questions you should probably ask when you are evaluating any of your investments: 1. Is this a good-quality investment?...
TransCanada Corp. has aggressively expanded its operations over the past few years to reduce its reliance on its regulated gas pipeline business. Regulation gives these businesses steady, predictable cash flows, but limits TransCanada’s overall growth. The company is now working on several new projects. These new operations could spur big gains in its earnings and cash flow for years to come. TRANSCANADA CORP. $36 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 578.0 million; Market cap: $20.8 billion; SI Rating: Above average) operates over 59,000 km of pipelines that transport natural gas, mainly from Alberta to markets in central and eastern Canada. The company also operates gas pipelines in the United States and Mexico. This business supplies 55% of TransCanada’s total revenue....
TERANET INCOME FUND $9.50, Toronto symbol TF.UN, has received a new takeover offer from the Ontario Municipal Employees Retirement System (OMERS). The new offer of $10.25 a unit is 6.8% less than the previous offer of $11.00. Teranet’s units are now trading for roughly 7% below the new offer. The lower offer reflects a slowing economy in Ontario and falling real estate values. That could hurt demand for Teranet’s electronic land registry services. As well, it’s increasingly difficult to secure loans for corporate takeovers. Teranet recommended that investors accept the first OMERS offer, after it failed to attract other bidders. Teranet has not yet commented on the new offer of $10.25 a unit. However, it’s still unlikely that a new bidder will emerge. As well, Teranet’s second-largest shareholder has accepted the new offer....
I still feel that government efforts now underway are likely to solve today’s financial crisis. However, these steps come at a price. My best guess is that we’ll see much higher inflation as a result of all this newly supplied liquidity, probably in the early part of the next decade. My view is that you should keep this inflationary potential in mind, but it’s too early to try to profit from it. That’s partly due to the drawbacks of Resources stocks. They do provide a handy hedge against inflation, and even many of the most pessimistic observers now feel that resource prices are bound to rise in the next few years, as millions of Indian and Chinese workers pole-vault into the middle class. But many pessimists felt the same way following the last great resource and commodity boom, in the 1970s and 1980s. After that boom ended, the sector went into a slump that lasted 15 years or more....
The Dow’s 11.1% gain on Monday was the fifth-biggest percentage gain on record. The 9.8% gain on Toronto the next day was the biggest ever. Markets remain volatile and have moved down since, but my view is that governments around the world are now taking the kind of steps that will contain the crisis and eventually restore liquidity in the banking system. You can only spot market reversals in hindsight, so it’s too early to declare if we are near a bottom. But even if we are, markets are apt to remain volatile and some stocks are bound to go to lower lows....
This downturn is going a lot further down that I ever expected. I still see it as a financial panic, rather than an indicator of the depth of the recession that now seems to have started. In other words, the market drop reflects a drying up in lending activity and fear of a depression, rather than a drying up in business activity. In the depths of a market downturn, some observers always predict that we are on the verge of another 1930s depression. In the 1930s, however, the U.S. and other governments did all the wrong things. They raised taxes, raised tariffs and did nothing to halt bank failures. The U.S. and other governments are doing all the right things to revive lending and credit, in my view. They are injecting funds into the financial system, arranging takeovers of failing financial companies, and moving to protect depositors. Eventually these efforts will pay off. Lending will then swiftly revive, and the market will go through a sharp recovery. There is no way to tell when that will happen, but you can bet that it will spur widespread disbelief, and warnings that it is just a temporary reprieve and that the downturn will soon resume....
Despite a stream of nerve-rattling financial news, starting with the failure of the first U.S. bailout package, the Dow Industrials and the S&P 500 managed to hold above Monday’s lows this week until just before Friday’s close. It’s a mistake to read too much into this, of course. But it is encouraging to see these two indexes move sideways in this depressing news environment. The plunge to new lows by the Canadian market reflects the heavy resources content in our economy and stock market. The Resources sector stands to suffer in an economic setback, and that’s already begun to happen with the drop in oil, copper and other metals. In addition to the decline in our market, our dollar lost nearly four cents this past week, relative to the U.S. dollar. We continue to recommend that you spread your investments our across the five main economic sectors, and devote around a quarter of your portfolio to U.S. stocks. Market turnarounds often occur in times of high volatility and bad news. Our advice is to resist any urge you may feel to sell good-quality stocks, just because you fear they may go lower....