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
MAPLE LEAF FOODS INC. $8.89 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 126.9 million; Market cap: $1.1 billion; SI Rating: Average) has traced the source of the recent outbreak of listeria contamination to meat slicing equipment at its Toronto processing plant. The outbreak has forced Maple Leaf to recall all of the products produced at its Toronto plant. There is no evidence of listeria contamination at the company 22 other facilities, which continue to operate normally. The recall will cost Maple Leaf $20 million, or 10% of the $199 million or $0.51 a share it earned in 2007. The company also faces several class action lawsuits. This situation is a good example of why we recommend that investors stick with well-established companies. The bad publicity over the recall would probably have forced a smaller, lesser-known company to go out of business....
Like all phone companies, Telus faces increasing competition in its traditional markets from cable companies and Internet-based phone services. However, it’s offsetting this with robust growth in faster-growing businesses such as wireless and high-speed Internet services. There’s also competition from new entrants in the wireless field. But just 60% of Canadians use a cellphone, so there’s still plenty of room to grow. Telus’s strong brands and reputation should continue to help it win new wireless customers. TELUS CORP. (Toronto symbols T $40 and T.A $39; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 335.6 million; Market cap $13.4 billion; SI Rating: Above average) provides local and long distance telephone service to 4.3 million customers in Alberta, British Columbia and Eastern Quebec. This business supplies about 29% of Telus’s revenue....
Some investors worry that Washington’s $700 billion bailout of the banking industry is going to fall apart, and that this will lead to a rise in gold and a drop in the stock market. We think the bailout will go through. The only obstacle to it is the political bickering and posturing that is bound to go into a highly visible effort like this, all the more so just prior to a presidential election. There is always a possibility that the market will move lower from here. Meanwhile, gold will stay volatile. But we still feel stock prices will hit bottom over the next month or two, then move up for six months or more. ENCANA CORP. $71.22, Toronto symbol ECA, now plans to expand its refinery in Roxana, Illinois. The company and ConocoPhillips each own 50% of this facility. This upgrade will increase the plant’s total capacity by 16%. It will also let the plant handle increasing production from EnCana’s oil sands operations in Alberta....
Today’s rebound in the market is reassuring, but I expect stocks to remain highly volatile for a month or more. After that, we could see a six-month rebound in prices. The U.S. bailout of major financial institutions raises inflation risk over the next few years, but it heads off panic. Nobody can predict market bottoms, but I suspect we are much closer to the bottom than the top. NORTEL NETWORKS CORP. $3.25, Toronto symbol NT, fell 50% this week after the company cut its revenue and earnings outlook for 2008. Due to slowing demand for telecommunications equipment, unfavourable foreign exchange rates and delays delivering certain products, Nortel now expects revenue for 2008 will be 2% to 4% lower than in 2007. It had earlier predicted that revenue would rise this year. Due to the lower revenues, Nortel will probably lose $0.39 U.S. a share in 2008. That estimate excludes the costs of a new restructuring plan. Nortel earned $0.37 U.S. a share before unusual items in 2007....
TRANSCONTINENTAL INC. $13.85, Toronto symbol TCL.A, earned $30.3 million in its third fiscal quarter ended July 31, 2008, up 6.7% from $28.4 million a year earlier. Per-share earnings rose 11.8%, to $0.38 from $0.34 on fewer shares outstanding. These figures exclude unusual items. Revenue rose 6.1%, to $584.9 million from $551.1 million. If you exclude the negative impact of the higher Canadian dollar on Transcontinental’s U.S. and Mexican operations, revenue in the quarter would have grown 8%. Transcontinental’s recent investments in new printing presses should continue to keep its costs low. The company’s expertise and flexibility is also helping it win new printing contracts. For example, it recently started to print flyers for Shoppers Drug Mart in a deal worth $25 million a year. Transcontinental is a buy....
TERANET INCOME FUND $11.47, Toronto symbol TF.UN, is now the target of a hostile $11.00-a-unit takeover offer from the Ontario Municipal Employees Retirement System. As part of the deal that established Teranet as a public company in June, 2006, the Ontario government capped the amount a single investor can own at 25%. So, any takeover would require government approval. (Teranet has an exclusive license from the Ontario government to operate the province’s electronic land registry system until 2017.) Despite this hurdle, Teranet’s units are trading above the offer price. That suggests that investors feel a higher offer is likely....
TransCanada Corp. $40 (Toronto Symbol TRP Conservative Growth Portfolio, Utilities sector; Shares outstanding: 578.0 million; Market cap: $23.1 billion; SI Rating: Above average) has received approval to build a pipeline that would transport natural gas from northern Alaska to the Alberta-British Columbia border. From there, TransCanada would ship the gas through existing pipelines to markets in Canada and the continental United States. The project could take a decade to complete, and cost $26 billion. That’s 13% more than TransCanada’s market cap. However, Alaska has huge natural gas reserves. TransCanada would probably bring in partners to cut its costs. As well, the company expects to receive $500 million U.S. in assistance from the Alaskan government....
Torstar Corp. $14 (Toronto symbol TS.B Conservative Growth Portfolio, Consumer sector; Shares outstanding: 78.9 million; Market cap: $1.1 billion; SI Rating: Above average) publishes The Toronto Star, as well as other daily and community newspapers in southern Ontario. It also owns Harlequin Enterprises, the world’s largest publisher of romance novels. Like most newspaper publishers, Torstar has suffered in past few months due to the slowing economy. Advertisers are also shifting spending away from newspapers to the Internet. As well, rising newsprint and distribution costs are squeezing its profit margins. Torstar recently cut its workforce by 4%, which should save it $17 million a year. The company is now starting to realize some of these savings. In the three months ended June 30, 2008, earnings rose 23.7% to $0.47 a share (total $37.0 million) from $0.38 a share ($30.1 million) a year earlier. If you disregard restructuring charges and a gain on the sale of assets, Torstar’s earnings would have grown 15.8% to $0.44 a share. Higher earnings at Harlequin, the community newspapers and Torstar’s Internet operations also contributed to the gain. Revenue crept up to $399.5 million from $397.0 million. If you exclude the negative impact of the higher Canadian dollar, revenue rose 1.5%....
Loblaw Companies Ltd. $29 (Toronto symbol L Conservative Growth Portfolio, Consumer sector; Shares outstanding: 274.2 million; Market cap: $8.0 billion; SI Rating: Above average) now feels it will take several months longer before it starts to realize the benefits of its current restructuring plan. That’s because of increasing price competition. In the three months ended June 14, 2008, earnings per share improved 18.6%, to $0.51 from $0.43 a year earlier. However, if you exclude unusual items, per-share earnings fell 23.2%, to $0.45 from $0.59. Sales rose 1.4%, to $7.0 billion from $6.9 billion. Same-store sales rose 0.7%. Loblaw’s gross profit margin fell to 5.3% in the latest quarter from 6.0% a year earlier. Loblaw’s margins should start to move up over the next few quarters, but strong competition will probably prevent it from surpassing its peak profit margin of 8.1% in 2005. Loblaw’s continues to re-model older stores, improve its distribution systems and rejuvenate its private label products. These initiatives should help it maintain its leading market share....
IMPERIAL OIL LTD. $49 (Toronto symbol IMO; Conservative Growth Portfolio, Resource stocks sector; Shares outstanding: 882.1 million; Market cap: $43.2 billion; SI Rating: Average) is a leader in resource stocks, producing roughly 6% of Canada’s oil and gas. The company also operates oil refineries, plus around 1,900 retail gas stations under the ‘Esso’ banner. ExxonMobil Corp. owns 69.6% of Imperial’s stock. Imperial currently gets over 60% of its production from Alberta’s oil sands. It owns 25% of the massive Syncrude project, whose reserves should last 28 years at current production rates. Imperial also owns 100% of the Cold Lake oil sands project. Cold Lake should last 13 more years.