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
Bank of Nova Scotia $45 (Toronto symbol BNS Conservative Growth Portfolio, Finance sector; Shares outstanding: 985.0 million; Market cap: $44.3 billion; SI Rating: Above average) Bank of Nova Scotia is down from $55 a year ago, mainly due to writedowns of illiquid asset-backed securities. The rising Canadian dollar has also hurt the performance of its international operations, which supply about a third of its earnings. In its first fiscal quarter ended January 31, 2008, earnings fell 18.8% to $0.82 a share (total $835 million) from $1.01 a share ($1.0 billion) a year earlier. The latest quarterly earnings included $238 million in pre-tax writedowns and other charges. Revenue fell 9.7%, to $2.8 billion from $3.1 billion. However, lower interest rates should spur demand for new loans. The bank is also doing a good job controlling non-interest costs. Bank of Nova Scotia is a buy.
Royal Bank of Canada $47 (Toronto symbol RY Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.3 billion; Market cap: $61.1 billion; SI Rating: Above average) Royal Bank is expanding its wealth management operations. In Canada, it has agreed to acquire Phillips, Hager & North Investment Management Ltd., which has $69 billion in assets under management. Royal will pay roughly $1.3 billion in stock. In the United States, Royal has agreed to buy banking and investment firm Washington D.C.-based Ferris, Baker Watts, Inc. The bank did not reveal the price, but Ferris has $18.5 billion U.S. in assets under administration. These purchases will increase Royal’s assets under management by roughly 50%. Meanwhile, Royal earned $0.95 a share (total $1.2 billion) in the three months ended January 31, 2008, down 16.7% from $1.14 a share ($1.5 billion) a year earlier. The latest earnings included a $187 million writedown of securities backed by U.S. subprime mortgages. Revenue fell 1.7%, to $5.7 billion from $5.8 billion....
Fears of a slowing economy and falling advertising revenue have hurt all three of these information providers in the past few months. However, investments in new printing presses and other modern equipment will help keep their costs down. They should also gain from their expanding Internet businesses and lower computing costs. 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) publishes The Toronto Star, Canada’s largest daily newspaper. It also publishes other daily and community newspapers in Southern Ontario. Newspapers supply 70% of Torstar’s profit and revenue. The remaining 30% comes from wholly owned subsidiary Harlequin Enterprises Ltd., which is the world’s largest publisher of romance novels....
Teck Cominco operates in the Resources sector, which along with Manufacturing is one of the two most volatile and cyclical of the five main economic sectors (the other three are Finance, Consumer and Utility). Teck compounds its risk by growing through acquisitions. That’s riskier than internal growth because new operations may fail to live up to expectations, particularly in mineral development. However, Teck’s mining expertise and its exposure to a wide variety of minerals tempers that risk. That makes it an attractive choice for conservative investors who want a relatively low-risk mining investment. TECK COMINCO LTD. $43 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 441.9 million; Market cap: $19.0 billion; SI Rating: Average) is the world’s top producer of zinc, which accounts for 35% of Teck’s revenue....
BCE INC. $38 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 805.1 million; Market cap: $30.6 billion; SI Rating: Above average) moved up after a Quebec judge ruled against a lawsuit launched by BCE bondholders who objected to the $42.75 takeover bid it has accepted. The stock is still about 10% below the takeover price, mainly due to the current lack of liquidity in the debt market. Investors fear that the buyers will find it hard to finance the takeover. In addition, the deal still requires regulatory approval. If the takeover fails to go through, BCE’s stock would fall. But we feel BCE is attractive at current prices, for short-term takeover-fueled capital gains, or as a long-term buy for growth and income....
IMPERIAL OIL LTD. $55 (Toronto symbol IMO) continues to ration gasoline deliveries to its 532 Esso gas stations in Western Canada due to problems at its refinery in Edmonton. The company is importing and buying fuel from other suppliers as it repairs the plant. It’s unlikely the problem will have a material impact on its earnings. Best Buy. MOLSON COORS CANADA INC. $52 (Toronto symbol TPX.B) moved down after the company said it will delay further share buybacks or dividend increases until after it determines the costs of its deal to merge its operations in the U.S. with those of rival brewer SABMiller plc. However, cost savings from the merger will help the company cope with rising prices for barley and hops. Buy. CANADA BREAD CO. LTD. $71 (Toronto symbol CBY) now accounts for over 95% of the market cap of parent company MAPLE LEAF FOODS INC. $13. Canada Bread is now a hold. For new buying, we recommend Maple Leaf Foods....
NOVA CHEMICALS CORP. $24.66, Toronto symbol NCX, is down from its peak of $43.70 in July 2007, mostly due to fears of a slowing economy in the United States. Sales in the U.S. accounted for 43% of Nova’s 2007 sales. Manufacturers use the company’s products to make a wide variety of plastic products including auto parts, construction materials and packaging. Nova also needs large amounts of crude oil and natural gas to make its products, which increases its exposure to rising energy costs. However, Nova’s proximity to Alberta’s large natural gas reserves helps keep its input costs down. The recent merger of its money-losing foam cup business into a 50:50 joint venture also cuts its costs. Nova’s highly cyclical operations make it riskier than most of our recommendations. However, it’s cheap at just 7.3 times its likely 2008 earnings of $3.30 U.S. a share....
TRANSCANADA CORP. $38.06, Toronto symbol TRP, has teamed up with U.S.-based Williams Companies Ltd. to evaluate the Sunstone project, a proposed pipeline that would transport natural gas from the Rockies to the western United States. Sunstone could begin operations in 2011. Both companies already operate pipelines in the region, which cuts the risk of this project. TransCanada is a buy. TRANSALTA CORP. $30.36, Toronto symbol TA, fell 10% this week after activist shareholder Luminus Management withdrew its slate of director nominees....
BCE INC. $37.24, Toronto symbol BCE, gained 7% this week after a Quebec court dismissed a class-action lawsuit launched by the company’s bondholders. The ruling improves the chances that the $42.75-a-share takeover by a group led by the Ontario Teachers’ Pension Plan will succeed. The stock is now trading at roughly 13% below the offer, partly because the deal still requires regulatory approval. In addition, the problems in the credit markets could also make it harder for the consortium to issue the bonds it needs to finance the takeover. If the deal falls through, BCE’s stock could fall to its pre-takeover level of around $30. However, the company’s operations still generate plenty of cash flow, and it could unlock value by spinning off some of its operations....
The markets rattled many investors this week with steep one-day drops. At times like this, it’s good to remember that even when a further decline lies ahead, high volatility generally signals that it’s “a good time to buy”, rather than “a good time to sell”. It’s also encouraging to see that despite the steep one-day drops, most major market indexes are still at or above the lows they hit in January. BANK OF MONTREAL $43.10, Toronto symbol BMO, fell over 10% this week after it announced writedowns of asset-backed securities and higher loan loss provisions. In its first fiscal quarter ended January 31, 2008, earnings fell 26.7% to $255 million or $0.47 a share from $348 million or $0.67 a share a year earlier. The latest earnings figure included a $324 million after-tax writedown of securities, plus a $38 million rise in loan loss provisions. If you exclude unusual items, earnings fell 8.3%....