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
LINAMAR CORP. $14 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 69.8 million; Market cap: $977.2 million; SI Rating: Speculative) has started selling a new, rechargeable electric lawn mower that performs as well as a traditional gasoline-powered lawnmower. This new mower should appeal to environmentally conscious consumers. Linamar will also offer customers a recharger that uses solar energy instead of a regular electrical outlet. Innovative consumer products like this should help Linamar offset its exposure to the slowing North American auto and construction industries. Linamar is a buy.
When a company’s assets are ignored or hidden, the stock often trades for less than it’s really worth — so you get to buy at bargain prices. Here are two stocks that have lagged the market. Unlocking their hidden assets could lead to big gains. TORSTAR CORP. $17 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 78.7 million; Market cap: $1.3 billion; SI Rating: Above average) gets 70% of its earnings from newspapers. This includes The Toronto Star, the biggest daily paper in Canada, and a top choice for advertisers. Torstar has expanded its Internet properties in the past few years, which helps cut its exposure to declining newspaper circulation....
Saputo has nearly tripled for us since we first recommended it in our April, 2003 issue at $11 a share (adjusted for a 2-for-1 stock split in November 2007). We liked its ability to quickly absorb new operations and improve their profits, which offset the risk of its aggressive growth-by-acquisition strategy. Despite its success, the company receives little broker/media attention. That may be because the dairy industry seems dull to many investors. We still like Saputo’s strategy, and its latest purchases should fuel its growth for years to come....
CANADIAN PACIFIC RAILWAY LTD. $69.08, Toronto symbol CP, fell 4% this week as the slowing U.S. economy prompted the company to lower its earnings forecast for 2008, to $4.50 a share from an earlier estimate of $4.70. Revenue in the three months ended March 31, 2008 grew 2.7%, to $1.15 billion from $1.12 billion a year earlier. Higher volumes of grain, fertilizers and industrial goods helped offset lower shipments of lumber and automobiles. Earnings before unusual items fell 3.8%, to $0.75 a share from $0.78, due to severe winter weather, rising fuel costs and foreign exchange losses. The higher costs pushed CP’s operating ratio (regular operating costs divided by revenue – the lower, the better) up to 82.7% in the latest quarter from 79.5% a year earlier....
METRO INC. $25.25, Toronto symbol MRU.A, earned $58.1 million in its second quarter ended March 15, 2008, down 6.0% from $61.8 million a year earlier. Per-share earnings fell 3.8%, to $0.51 from $0.53, on fewer shares outstanding. If you exclude restructuring costs in the year-earlier quarter, earnings per share fell 8.9%. Sales in the quarter crept up to $2.37 billion from $2.36 billion, while same-store sales rose 0.3%. Strong price competition continues to hurt profits at Metro’s Ontario stores. However, the company is beginning to realize the benefits of a new computerized information system. A new distribution warehouse will also improve efficiency at its Quebec stores. Metro is a buy for aggressive investors....
FORDING CANADIAN COAL TRUST $62.31, Toronto symbol FDG.UN, rose 10% this week after South Korean steelmaker Posco agreed to pay $308 U.S. a tonne for coal from BHP Billiton in the coal year that began on April 1, 2008. That’s 210% more than the industry benchmark price of $98 U.S. in the prior year. Fording is still negotiating new prices with its customers. Higher coal prices will help it offset rising labour, transportation and other costs. It should also let Fording increase its current quarterly distribution of $0.50 a unit, which implies an annual yield of 3.2%. Fording is still a buy for aggressive investors....
TRANSCANADA CORP. $36.34, Toronto symbol TRP, fell about 9% this week after it agreed to buy the Ravenswood power plant located in Queens, New York for $2.9 billion U.S. The plant has the capacity to service 21% of New York City’s peak electricity load. The price is 10% more than TransCanada’s 2007 cash flow of $2.6 billion or $4.95 a share. TransCanada will probably issue $1.2 billion worth of new common shares to help pay for this purchase. TransCanada foresees as much as $2 billion in investment opportunities for capacity expansion and efficiency improvements at the facility. As well, Ravenswood provides diversification in power generation and into the U.S....
SNC-Lavalin Group Inc. $46 (Toronto symbol SNC Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 151.0 million; Market cap: $6.9 billion; SI Rating: Average) earned $0.45 a share (total $69.1 million) in 2007, down 49.4% from $0.89 a share ($136.6 million) in 2006. The 2007 results included a $267.3 million pre-tax operating loss at its power division due to delays in constructing a new power plant in Brampton, Ont. Revenue rose 28.8% to $6.7 billion from $5.2 billion. SNC has also increased its quarterly dividend by a third, from $0.09 a share to $0.12. The new annual rate of $0.48 yields 1.0%. However, the stock is expensive at 29.1 times its forecast 2008 earnings of $1.58 a share, particularly for a cyclical company. SNC-Lavalin is a hold.
Fierce price competition in Ontario has hurt earnings growth at Loblaw and Metro in the past year. While both are doing a good job controlling costs, we see only one a buy right now. LOBLAW COMPANIES LTD. $28 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 274.2 million; Market cap: $7.7 billion; SI Rating: Above average) is Canada’s largest grocery store operator, with over 1,000 company-owned and franchised stores. Major banners include Loblaw, No Frills, Provigo and Real Canadian Superstore. George Weston Ltd. owns 61% of Loblaw’s stock. Loblaw is currently restructuring its operations, as it de-emphasizes general merchandise and focuses on food. This includes overhauling its supply chain and computerized inventory systems to improve in-store availability and product freshness. The company also aims to make better use of its size to secure lower purchase prices from its suppliers....
Indigo Books & Music Inc. $13 (Toronto symbol IDG Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 24.8 million; Market cap: $322.4 million; SI Rating: Speculative) is Canada’s largest book retailer. It operates 88 superstores under the Chapters, Indigo and the World’s Biggest Bookstore banners, plus 161 small format stores. Indigo also sells products over the Internet. The company has expanded into gifts, educational children’s toys and electronic products in the past few years to cut its reliance on books. It focuses on high-end merchandise to avoid directly competing with discount retailers such as Wal-Mart. In its third fiscal quarter ended December 29, 2007, Indigo’s earnings rose 20.0%, to $49.2 million from $41.0 million a year earlier, but that’s mostly due to a one-time $7.6 million non-cash tax recovery. The year-earlier quarter included a $1.6 million pre-tax writedown. Earnings per share rose 19.8%, to $1.94 from $1.62. The last quarter of the year includes Christmas and is the company’s busiest period. Indigo generally loses money in the other three quarters....