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 $48 continues to expand in Latin America. It has agreed to buy certain retail banking assets in Guatemala and the Dominican Republic for an undisclosed sum. The bank already operates in these countries, so the purchase will increase its market share. Best Buy. TORSTAR CORP. $18 has moved lower lately on fears that a slowing economy would hurt advertising revenue. Rising newsprint and labour costs will also squeeze its profit margins. As well, the high Canadian dollar hurts profits at its Harlequin book division. However, Torstar’s expanding Internet businesses should help it maintain the $0.74 dividend, which yields 4.1%. Best Buy. TORONTO-DOMINION BANK $67 will not participate in a plan to restructure the Canadian market for asset-based commercial paper (ABCP). Demand for non-bank ABCP fell sharply in 2007 due to concerns over the quality of the underlying assets, particularly their exposure to subprime mortgages in the United States. TD feels that since it did not issue these securities, it should not have to contribute cash to a rescue fund. Buy.
LINAMAR CORP. $17 (Toronto symbol LNR; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 69.8 million; Market cap: $1.2 billion; SI Rating: Speculative) is Canada’s second-largest maker of automobile parts after Magna International Inc. Major customers include General Motors, Ford, Chrysler and Caterpillar. Linamar is positioned to benefit from the increasing sophistication and technological content of cars and trucks. Investments in new facilities have also helped it win contracts with carmakers.
Non-auto businesses help cut risk
The company is making progress with its plan to reduce its reliance on the auto industry, which supplies 85% of its revenue. It owns Skyjack, a leading maker of self-propelled, scissor-type elevating work platforms. Linamar is now applying its precision manufacturing expertise to other industries, such as machinery for the mining and oil exploration markets....
METRO INC. $23 (Toronto symbol MRU.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 113.1 million; Market cap: $2.6 billion; SI Rating: Extra risk) currently operates 156 grocery stores in Ontario under the A&P, Loeb, Dominion, Ultra Food & Drug and The Barn Markets banners. It also has 116 discount Food Basics stores. The company now plans to shrink these operations to one or two banners. That would cut its marketing costs. Due to heavy competition in Ontario, Metro’s sales in its first fiscal quarter ended December 22, 2007 fell slightly to $2.51 billion from $2.52 billion a year earlier. Same-store sales were unchanged. Earnings per share before unusual items fell 17.7%, to $0.51 from $0.62....
TERANET INCOME FUND $10 (Toronto symbol TF.UN; Aggressive Growth Portfolio: Manufacturing & Industry sector; Units outstanding: 155.0 million; Market cap: $1.6 billion; SI Rating: Speculative) has won a contract from the City of Toronto to collect a new tax on land transfers. Teranet will also process rebates for eligible home buyers. Teranet did not reveal the value of this deal, but it’s a good fit with its electronic land registry and information services. It could also lead to similar deals with other municipalities. Teranet is a buy....
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) earned a record $4.16 a share in 2007, compared to a loss of $8.52 in 2006 (all amounts except share price and market cap in U.S. dollars). The 2006 loss included a $9.35 a share restructuring charge. Nova’s proximity to Alberta’s large natural gas reserves keeps its input costs low. The company is also enjoying the benefits of recent upgrades to its plants. Revenue rose 3.1%, to $6.7 billion from $6.5 billion, on higher volumes and prices. Nova will probably earn $4.16 U.S. in 2008, and the stock trades at just 6.7 times that figure. The $0.40 (Canadian) dividend yields 1.4%. Nova Chemicals is a buy.
Andrew Peller and Molson Coors continue to expand their premium brands. That will help them profit from a growing interest in luxury items, particularly among aging baby boomers. ANDREW PELLER LTD. $9 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.9 million; Market cap: $134.1 million; SI Rating: Above average) operates wineries in Ontario, Nova Scotia and B.C. The company has built up its premium wine business in the past few years, mainly through acquisitions. That has helped it expand its market share to about 12% of the Canadian wine market ....
BCE INC. $35 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 805.3 million; Market cap; $28.2 billion; SI Rating: Above average) is trading for 20% below the $42.75-a-share takeover offer it accepted in July 2007. That’s mainly because several institutional holders of BCE bonds have launched a class-action lawsuit to oppose it. BCE’s plan to take on more debt has hurt the value of their holdings. If the suit succeeds and forces BCE to compensate the bondholders for their losses, the Ontario Teachers’ Pension and its partners may decide to abandon the takeover. Liquidity problems in the debt markets could also scuttle the takeover, since that could hurt the ability of the takeover consortium to issue new bonds. At the current reduced price, BCE is once again attractive for its income and growth prospects. The shares now trade at 15 times earnings, and have a dividend yield of 4.2%....
GENNUM CORP. $10 (Toronto symbol GND; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 35.8 million; Market cap: $358.0 million; SI Rating: Above average) recently sold its hearing aid and headset operations to focus on making its core video equipment for broadcasters. Gennum also plans to expand into consumer products. Demand for its expertise should be high among TV set makers, as sales of high-definition sets and DVD players grow. New products should provide 10% of Gennum’s revenue this year. Meanwhile, earnings per share in the year ended November 30, 2007 fell 16.2%, to $0.62 from $0.74 in 2006. Revenue rose 6.3%, to $111.5 million from $104.0 million. Gennum spends a high 19.0% of its revenue on research....
RIOCAN REAL ESTATE INVESTMENT TRUST $22 (Toronto symbol REI.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 209.5 million; Market cap: $4.6 billion; SI Rating: Average) moved down in January on investor concerns that problems in credit markets would hinder its expansion, and that a slower economy might hurt its cash flows. However, interest rates have dropped, and occupancy and leasing rates remain high at REITs in Canada. RioCan’s total occupancy is 97.6%, and anchor tenants account for 82.6% of its rental revenue. RioCan is also designing mixed-used properties that combine retail stores with residential units. New developments like this help it expand in built-up areas, and diversify its revenue streams. That should help it maintain monthly distributions of $0.1125 a unit (for a yield of 6.1%). RioCan is a buy.
Falling interest rates have rekindled investor interest in high-yielding utility stocks, such as these five. All of them have a long history of increasing dividends. Unlike interest payments on bonds, dividends qualify for the dividend tax credit. As well, stocks offer you open-ended returns, so they can give you protection against inflation. Bonds can’t provide this protection, because they are fixed-return investments. We see all five of these utilities as buys for long-term gains and income. TRANSCANADA CORP. $39 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 540 million; Market cap: $21.1 billion; SI Rating: Above average) operates a 59,000-km network of natural gas pipelines in Canada and the United States. This business supplies 70% of its profit. The remaining 30% comes from its electrical power operations. TransCanada aims to cut its reliance on its regulated pipeline business with new growth projects. These include the Keystone pipeline, which will transport crude oil from Alberta’s oil sands to the U.S. Midwest. Initial deliveries should begin in late 2009....