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
TRANSCANADA CORP. $38.00, Toronto symbol TRP, and U.S.-based oil producer ConocoPhillips each own half of the proposed Keystone pipeline project, which will transport crude oil from Alberta’s oil sands to the United States. Due to strong interest from oil shippers, the partners now plan to extend the pipeline from the U.S. Midwest to refineries in the Gulf Coast region. They will also expand Keystone’s total capacity. This $7 billion U.S. expansion will increase the total cost of the project to $12.2 billion U.S. TransCanada’s share of that total comes to $6.1 billion U.S., which is equal to 2.4 times its 2007 cash flow of $2.6 billion (Canadian) or $4.93 a share. Keystone will reduce TransCanada’s reliance on its traditional gas pipeline business. The partners aim to complete this extension by the end of 2011....
BCE INC. $39.25, Toronto symbol BCE, gained $4 last Friday after it agreed to stop paying common share dividends as part of a new deal with the consortium headed by the Ontario Teachers’ Pension Plan that plans to buy BCE. The consortium will still pay $42.75 a share for BCE, and aims to close the transaction by December 11, 2008. However, suspending the dividend will save the company about $900 million, and make it easier for the consortium to secure the roughly $35 billion from lenders they need to complete the acquisition. The consortium has also agreed to pay BCE $1.2 billion if it backs out of the deal, up 20% from the original break-up fee of $1 billion. BCE is still a buy....
BCE INC. $35.15, Toronto symbol BCE, has deferred declaring its second quarter common share dividend of $0.365 a share. That will save the company $294 million. BCE feels holding on to the cash will help make the $42.75-a-share takeover price more attractive to the buyers. The buyers may wind up paying less for BCE in the wake of tighter bank lending and lower stock markets. But if the dividend deferral pushes up the ultimate price, and you hold your shares outside an RRSP, you will wind up better off — the tax rate on the capital gains you’ll realize on the takeover is less than the tax you would have paid on the dividend. BCE is still a buy....
BCE INC. $35 has delayed declaring its second-quarter dividend of $0.365 a share. The company is currently appealing a ruling by the Quebec Court of Appeal in favour of BCE’s bondholders that could threaten the company’s $42.75-a-share privatization plan. The case will go to the Supreme Court of Canada on June 17, 2008....
FINNING INTERNATIONAL INC. $27 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 172.6 million; Market cap: $4.7 billion; SI Rating: Above average) is one of the world’s largest dealers of heavy equipment made by Caterpillar Inc. Products include tractors, bulldozers, pavers and trucks. Major customers include the mining, forest products and construction industries. Thanks to rising prices for energy and other commodities, Finning’s revenue rose from $3.6 billion in 2003 to $5.7 billion in 2007. Earnings fell from $0.84 a share (total $132.0 million) in 2003 to $0.72 a share ($114.9 million) in 2004, but grew to $1.55 a share ($280.1 million) in 2007.
South America helps fuel growth
Canada is Finning’s biggest market at 52% of 2007 revenue. It operates mainly in Western Canada, the Yukon, the Northwest Territories and Nunavut. However, much of Finning’s recent growth is due to acquisitions, particularly in Argentina, Bolivia, Chile and Uruguay. South America supplied roughly 25% of Finning’s 2007 revenue....
ARBOR MEMORIAL SERVICES INC. $27 (Toronto symbol ABO.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 10.7 million; Market cap: $288.9 million; SI Rating: Average) owns 41 cemeteries, 27 crematoria, four reception centres located on cemetery premises and 90 funeral homes in eight provinces. In its second fiscal quarter ended April 30, 2008, Arbor earned $0.60 a share, down 9.1% from $0.66 a year earlier. Revenue fell 1.5%, to $58.4 million from $59.3 million. Arbor is a buy for aggressive investors. RIOCAN REAL ESTATE INVESTMENT TRUST $21 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 212.0 million; Market cap: $4.5 billion; SI Rating: Average) has formed a second joint venture with U.S.-based real estate developer Kimco Realty Corp. This new 50-50 partnership has agreed to buy 10 retail shopping centres in central and eastern Canada. RioCan will manage these properties....
TORONTO-DOMINION BANK $68 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 747.7 million; Market cap: $50.8 billion; SI Rating: Above average) earned $1.32 a share in its second fiscal quarter ended April 30, 2008, down 2.9% from $1.36 a year earlier. These figures exclude restructuring costs related to the bank’s recent purchase of U.S.-based Commerce Bancorp, Inc. and other one-time items. Loan loss provisions grew 35%. Revenue slipped to $3.4 billion from $3.5 billion. Lower fees and trading losses at its investment banking operations offset strong gains at its Canadian and U.S. retail banking operations. TD’s stock fell to $59 in March 2008 due to fears of subprime loan losses at its expanding U.S. operations. However, Commerce Bancorp has only nominal exposure to subprime loans. The stock now trades at 11.9 times its projected fiscal 2008 earnings of $5.73 a share. TD is one of our high dividend stocks, with the $2.36 dividend yielding 3.5%. TD Bank is a buy....
IMPERIAL OIL LTD. $59 (Toronto symbol IMO; Conservative Growth Portfolio, Resources sector; Shares outstanding: 892.0 million; Market cap: $52.6 billion; SI Rating: Average) can resume work on its Kearl Lake oil sands project. The company suspended development earlier this year after regulators withdrew a key permit, but Ottawa gave Imperial a new permit. Imperial owns 70% of Kearl Lake, while its parent company ExxonMobil owns the other 30%. Imperial’s share of the $8 billion cost is $5.6 billion, or 1.8 times the $3.2 billion or $3.41 a share it earned in 2007. The company will probably have to spend more to comply with tougher environmental regulations. However, Kearl Lake could still begin production in 2011 as originally planned. Imperial Oil is a buy.
Canadian Tire is much larger than Hart Stores, but earnings at both retailers have suffered lately. However, Canadian Tire’s iconic status and Hart’s focus on smaller communities are competitive advantages that will spur long-term growth. CANADIAN TIRE CORP. $56 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.5 million; Market cap: $4.6 billion; SI Rating: Above average) operates 473 stores that specialize in automotive, household and sporting goods. It also operates gas stations, casual clothing stores (Mark’s Work Wearhouse) and auto parts stores (PartSource). Canadian Tire has had great success in the past few years with its re-designed stores, which improve customer satisfaction and encourage repeat visits. It now plans to test two new formats this year: a store for smaller cities and rural markets that is about one-third the size of a typical Canadian Tire outlet; and a “smart” store featuring in-store boutiques and self-service checkouts....
ANDREW PELLER LTD. $10 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.6 million; Market cap: $146.0 million; SI Rating: Above average) is Canada’s second-largest producer of wines (after Vincor Canada), with about 12% of the market. Other products include premium beers (under the Granville Island brand) and home winemaking kits. The company sells its products mainly through provincial liquor agencies, as well as more than 100 company-owned retail stores in Ontario. The company continues to expand its premium wine operations, which generate higher profits than its regular brands. This includes new investments in vineyards, which has increased the supply and quality of grapes. Thanks to strong demand for Peller’s premium brands, sales in the fiscal year ended March 31, 2008 rose 3.9%, to $237.1 million from $228.1 million in the prior year. Earnings grew 20.0%, to $0.78 a share (total $11.4 million) from $0.65 a share ($9.5 million). If you exclude all unusual items, Peller’s earnings in fiscal 2008 would have grown 10.4%, to $10.6 million....