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
Watch Pat McKeough’s June 20 interview on the Business News Network “Market Call” program with Michael Hainsworth. Click here to see the interview. Or, go to www.bnn.ca and you’ll find the link on the lower right side of the page. BCE INC. $34.60, Toronto symbol BCE, should move higher next week now that the Supreme Court of Canada has ruled against a lawsuit launched by the company’s bondholders. The bondholders claimed that the takeover of BCE by a consortium headed by the Ontario Teachers’ Pension Plan would reduce the security of their investments. While this latest ruling greatly improves the chances the $42.75-a-share takeover will go through, problems in the debt markets could still prompt some of the consortium members to back out. That could force the buyers to delay, reprice or scrap the deal. If so, the stock will probably fall, but it is likely to stay above its pre-takeover level of around $30 a share....
PRECISION DRILLING TRUST $27.58, Toronto symbol PD.UN, has launched a hostile takeover offer for Grey Wolf Inc. of Houston. Grey Wolf operates 121 drilling rigs in the U.S. Gulf Coast and Midwest regions. Right now, just 17 of Precision’s 240 rigs operate in the U.S. Expanding outside of Canada will give Precision steadier revenue streams, as many of its Canadian customers suspend exploration during the winter. Precision is offering cash and units worth roughly $2 billion U.S. for Grey Wolf. Precision will limit the cash portion to one-third of the total. The price is nearly five times Precision’s 2007 cash flow of $419.7 million (Canadian) or $3.34 a unit. Precision feels its offer is superior to Grey Wolf’s recent agreement to merge with rival Basic Energy Services, Inc. However, Grey Wolf has rejected Precision’s offer and still plans to merge with Basic Energy....
BOMBARDIER INC., Toronto symbols BBD.A $8.71 and BBD.B $8.72, rose 7% this week after reporting first quarter fiscal 2009 earnings and revenues that exceeded expectations. In the three months ended April 30, 2008, earnings per share jumped to $0.12 from $0.04 a year earlier (all amounts except share price in U.S. dollars). Revenue rose 20.0%, to $4.8 billion from $4.0 billion, due to strong demand for business aircraft, regional jets and railcars. Thanks to its improving outlook, Bombardier plans to resume quarterly dividend payments of $0.025 (Canadian) a share. That implies an annual yield of 1.1%. The class B subordinate voting shares will also receive an additional priority payment of $0.0015625 (Canadian) a share per year, payable quarterly. That gives the class B shares an annual yield of 1.2%. Bombardier is a buy for aggressive investors. The higher yielding ‘B’ shares are the better choice....
TORSTAR CORP. $13 (Toronto symbol TS.B) plans to restructure its newspaper operations. This will cost it $21 million, but should produce annual savings of $12 million. To put that in context, Torstar lost $0.04 a share (total $3.5 million) in the first quarter of 2008 largely from these restructuring costs. It earned $0.20 a share ($15.7 million) in the year-earlier quarter. Revenue fell 6.8%, due to slowing advertising revenue in Ontario. However, Torstar’s expanding Internet operations help diversify its revenues. Best Buy. MANITOBA TELECOM SERVICES INC. $41 (Toronto symbol MBT) earned $0.84 a share before unusual items in the first three months of 2008, up 5.0% from $0.80 a year earlier. Strong growth from its wireless, TV and Internet services will help the company offset lower revenue from its traditional phone operations, and help it keep paying its $2.60 dividend (6.3% yield). Best Buy. IMPERIAL OIL LTD. $57 (Toronto symbol IMO) earned $0.75 a share in the latest quarter, down 7.4% from $0.81 a year earlier, due to production problems at its Edmonton refinery. Imperial is now expanding its four refineries to handle rising oil sands production. Best Buy...
BOMBARDIER INC. (Toronto symbols BBD.A $6.63 and BBD.B $6.67; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $11.3 billion; SI Rating: Extra risk) is the world’s third-largest maker of passenger aircraft, after Boeing and Airbus. This division supplies 55% of total revenue, and 75% of earnings. The remainder comes from Bombardier’s transportation division, which makes passenger railcars. The company focuses on smaller planes, such as short-range regional and business jets. It’s now considering building bigger planes, such as the CSeries jet, which would seat between 110 and 130 passengers. That would put it in direct competition with Boeing and Airbus.
New plane has big potential
Demand for a plane like this could be huge, considering that the CSeries would consume 20% less fuel than current models. As well, many airlines will have to replace thousands of similar-size planes in the next few years....
MOLSON COORS CANADA INC. (Toronto symbols TPX.A $55 and TPX.B $57; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 150.4 million; Market cap: $8.6 billion; SI Rating: Average) continues to enjoy the benefits of its February 2005 merger with U.S. brewer Coors. Thanks mainly to lower operating costs, earnings in the three months ended March 30, 2008 jumped to $0.32 a share from $0.14 a year earlier (all amounts except share prices and market cap in U.S. dollars). The savings have also helped the company cope with rising prices for barley and hops. Sales rose 16.7%, to $1.4 billion from $1.2 billion, due to strong demand for its core brands in the United States and Canada. Sales growth in the UK lagged due to tax increases and a recent smoking ban in pubs. Molson Coors is a buy. The ‘A’ shares are the better choice....
NOVA CHEMICALS CORP. $28 (Toronto symbol NCX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 83.1 million; Market cap: $2.3 billion; SI Rating: Extra risk) has formed a joint venture with Reliance Industries Ltd. This new company will design and build energy efficient buildings in India, using construction components supplied by Nova. This alliance gives Nova an easy way to profit from India’s booming construction market. Nova Chemicals is a buy. GREAT-WEST LIFECO INC. $32 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; Shares outstanding: 894.1 million; Market cap: $28.6 billion; SI Rating: Above average) earned $0.73 a share in the three months ended March 31, 2008, up 25.9% from $0.58 a year earlier. If you exclude two unusual gains, Great-West’s earnings would have grown 3.4% to $0.60 a share in the latest quarter. Unfavourable foreign exchange rates also lowered Great-West’s most recent quarterly profits by $0.05 a share. Revenue jumped to $18.0 billion from $6.9 billion due to last year’s purchase of U.S.-based mutual fund manager Putnam Investments Trust....
THOMSON REUTERS CORP. $36 (Toronto symbol TRI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 640.3 million; Market cap: $23.1 billion; SI Rating: Above average) is the new name for The Thomson Corp. (old symbol TOC), following its merger with UK-based Reuters Group plc. The new company provides a variety of information services to professionals in the finance, medical, scientific and legal fields. If you assume the two companies merged on January 1, 2007, revenue in the three months ended March 31, 2008 would have increased 13.8%, to $3.3 billion from $2.9 billion a year earlier (all amounts except share price and market cap in U.S. dollars). Pro forma operating earnings, which exclude income taxes and interest costs, rose 36.6%, to $579 million from $424 million. The company expects the merger will cut its annual expenses by $1.2 billion by the end of 2011. Thomson Reuters is a buy....
We think it’s a good idea to diversify your Finance sector holdings with non-bank financial stocks, such Home Capital and Dundee Corp. These two are much more aggressive than the big five banks. However, Home Capital’s growth prospects and Dundee’s value help offset their risk. HOME CAPITAL GROUP INC. $41 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.5 million; Market cap: $1.4 billion; SI Rating: Extra risk) is the parent company of Home Trust Company, a federally regulated trust company that specializes in residential first mortgages to small business owners, the self-employed and others who don’t meet the stricter criteria of larger, traditional lenders. The stock fell to $30 in January 2008, mostly due to the ongoing writedowns of U.S. subprime residential mortgages by other lenders. However, Home Capital has no exposure to the U.S. Its conservative lending policies have also helped keep its credit losses down....
LOBLAW COMPANIES LTD. $33 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 274.2 million; Market cap: $9.0 billion; SI Rating: Above average) is Canada’s largest food retailer, with over 1,500 company-owned and franchised stores. George Weston Ltd. owns 62% of Loblaw’s common shares. The company is currently in the middle of a major restructuring plan, which aims to cut its distribution and other operating costs. That will help it compete with Wal-Mart, which is adding grocery items to its stores in Canada. Loblaw is making some progress, but it seems the turnaround will take longer than it originally expected. In the three months ended March 22, 2008, earnings rose 15.0%, to $0.23 a share from $0.20 a year earlier. However, if you exclude restructuring costs and other unusual items, per-share earnings fell 26.1%, to $0.34 from $0.46. Operating margin (profits after regular costs, — the higher, the better) rose to 4.5% in the latest quarter from 4.3%....