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
Pengrowth Energy Trust $17 (Toronto symbol PGF.UN Aggressive Growth Portfolio, Resources sector; Units outstanding: 248.3 million; Market cap: $4.2 billion; SI Rating: Average) has agreed to acquire Accrete Energy Inc. for $95 million in new units. The purchase price is equal to 35% of Pengrowth’s second-quarter cash flow of $267.9 million or $1.08 a unit. Accrete’s properties in the Harmattan region of Alberta will increase Pengrowth’s daily oil production by 6%, and its oil reserves by 3%. We generally downplay companies that rely on acquisitions for growth. But Pengrowth’s focus on proven properties that immediately add to its cash flow cuts this risk. Pengrowth is a buy for aggressive investors.
Maple Leaf Foods now owns 89.8% of subsidiary Canada Bread. Despite Canada Bread’s recent drop due to lower second-quarter earnings, it still accounts for a high 98% of Maple Leaf’s market value. That means you can buy Maple Leaf’s core meat processing business, which provides 70% of its total sales, for less than $0.30 a share. We feel Maple Leaf’s meat businesses and brands have a lot of enduring value. The recent cost-cutting plan should also improve the profitability of these operations. MAPLE LEAF FOODS INC. $11 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 126.9 million; Market cap: $1.4 billion; SI Rating: Average) is Canada’s largest food processing company. Its products include fresh and prepared meats and poultry, mostly under the Maple Leaf and Schneider brands. It also makes fresh and frozen bakery products through 89.8%-owned Canada Bread Co. Ltd. Maple Leaf is currently in the middle of major restructuring that will see it focus on more-profitable packaged meats and meals. In the past two years, it has sold its animal feed operations and scaled back its hog-processing operations. The company is also investing heavily in new plants and equipment....
Bank stocks have struggled since late last year, due to fears that the problems with subprime mortgages in the United States will spread to Canada. Most of Canada’s big five banks have some exposure to these troubled loans, and writedowns have hurt their recent earnings. Despite the losses, Canada’s major banks have enough capital to continue making new loans. We feel every Canadian investor should own at least two of these five banks. Bank of Nova Scotia is still our top choice for new buying. Royal Bank of Canada $48 (Toronto symbol RY; Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.3 billion; Market cap: $62.4 billion; SI Rating: Above average) is Canada’s largest bank, with total assets of $627.5 billion....
The supermarket business is getting more competitive. Wal-Mart continues to build new supercentres, which are 50% larger than its traditional stores. These supercentres sell discount-priced produce, dairy products and meat, as well as general merchandise. To compete, Canadian grocery chains Metro and Loblaw have aggressively cut their costs. They are also investing heavily in new inventory control technology and stores. We feel these moves will help both companies thrive in the next few years. However, we think a smaller company, like Metro Inc., is in a better position to expand earnings than Loblaw....
Two of our long-time recommendations — Transalta Corp. $37 (Toronto symbol TA; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 199.0 million; Market cap: $7.4 billion; SI Rating: Average) and...
FORTIS INC. $26, through subsidiary Terasen Gas, has formed a joint venture to build an experimental biogas project in West Vancouver. This facility will capture and purify gases from a sewage treatment plant, and then inject the treated gas into Terasen’s gas distribution system. If feasible, Terasen may develop larger facilities to recover gases from agricultural waste. Buy for your income stocks portfolio of income stocks. EMERA INC. $23 earned $0.37 a share in the second quarter of 2008, up 23.3% from $0.30 a share a year earlier. Earnings at its main Nova Scotia Power subsidiary rose about 30% in the latest quarter. If you exclude a one-time tax gain, earnings at this business fell 10%. The company has asked Nova Scotia electricity regulators for permission to increase rates by 11.9% in 2009. That would help it offset rising fuel costs. Buy for your income stocks portfolio of income stocks. TELUS CORP. $39 is Canada’s second-largest provider of wireless services with 28% of the market (market leader Rogers has 37%). Telus’s strong brand and ability to bundle Internet and regular phone services into discounted packages should help it compete with new entrants in the wireless market. Also a Buy....
PENGROWTH ENERGY TRUST $17 (Toronto symbol PGF.UN; Aggressive Growth Portfolio, Resources sector; Units outstanding: 248.3 million; Market cap: $4.2 billion; SI Rating: Average) has agreed to acquire Accrete Energy Inc. for $95 million in new units. The purchase price is equal to 35% of Pengrowth’s second-quarter cash flow of $267.9 million or $1.08 a unit. Accrete’s properties in the Harmattan region of Alberta will increase Pengrowth’s daily oil production by 6%, and its oil reserves by 3%. We generally downplay companies that rely on acquisitions for growth. But Pengrowth’s focus on proven properties that immediately add to its cash flow cuts this risk. Among royalty trusts, Pengrowth is a buy for aggressive investors.
GENNUM CORP. $10 (Toronto symbol GND; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 35.6 million; Market cap: $356.0 million; SI Rating: Above average) has acquired ASIC Architect Inc., a California-based developer of products for highspeed computer networks. The $1.5 million purchase price is equal to 25% of the $5.9 million or $0.17 a share that Gennum earned in its second fiscal quarter ended May 31, 2008 (all amounts except share price and market cap in U.S. dollars). The acquisition should help Gennum take advantage of rising demand for high-speed data communications equipment. Gennum is a buy. PETRO-CANADA $47 (Toronto symbol PCA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 484.4 million; Market cap: $22.8 billion; SI Rating: Average) continues to profit from high energy prices, which offset lower production from its offshore operations in Eastern Canada. In the three months ended June 30, 2008, earnings rose 46.0% to $2.38 a share from $1.63 a year earlier. These figures exclude unusual items. Cash flow per share jumped 49.3%, to $4.09 from $2.74. Revenue grew 38.2%, to $7.6 billion from $5.5 billion....
Nova Chemicals Corp. $26 (Toronto symbol NCX Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 83.1 million; Market cap: $2.2 billion; SI Rating: Extra risk) earned $0.21 a share (total $18 million) in the second quarter of 2008, down 78.1% from $0.96 a share ($80 million) a year earlier (all amounts except share price and market cap in U.S. dollars). If you exclude an $87 million loss on a hedging contract and other unusual items, earnings fell 1.2% to $83 million from $84 million. Per-share earnings were unchanged at $1.00. Revenue rose 29.4%, to $2.2 billion from $1.7 billion. Demand for plastics is cyclical, and could weaken with the U.S. economy. However, 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. They rely on more expensive crude oil. Nova Chemicals is a buy.
MAPLE LEAF FOODS INC. $8.75, Toronto symbol MFI, moved down again this week after it expanded its recall of meat products that may contain listeria bacteria. Maple Leaf has now recalled all of the over 220 products produced at its Toronto plant, instead of the 20 or so that it first identified as possibly containing the bacteria. There is no evidence of listeria contamination at the company’s 22 other facilities, which continue to operate normally. Maple Leaf is working with federal food safety officials to fix the problems at the Toronto plant. It will not re-open the plant until it completes its investigation. The company now estimates the recall will cost it $20 million. To put that in context, Maple Leaf lost $9.4 million or $0.07 a share in the three months ended June 30, 2008 due mostly to restructuring costs. The company also faces several class-action lawsuits....