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
THE THOMSON CORP. $40 (Toronto symbol TOC; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 641.3 million; Market cap: $25.7 billion; SI Rating: Above average) has sold 15% of TradeWeb, a provider of electronic bond trading services, to a group of nine major banks for $150 million (all amounts except share price and market cap in U.S. dollars). To put that in context, Thomson earned $0.48 a share (total $310 million) in the third quarter of 2007. The banks will also invest $100 million to expand TradeWeb’s operations into other areas, including equity trading and derivatives. They will own 80% of the profits from these new markets. The deal gives Thomson a low cost way to expand TradeWeb’s operations, and sell more of its wide range of other information products....
TRANSCONTINENTAL INC. $15 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 83.7 million; Market cap: $1.3 billion; SI Rating: Average) has paid an undisclosed sum for L’Autre Voix, a community newspaper that serves 13,500 households in the Côte-de-Beaupré region of Quebec. It has also acquired the Italian-language weekly newspaper Corriere Italiano, which serves the Italian community in the Montreal area. Transcontinental now operates 172 community newspapers across Canada. The stock has moved down lately, as the high Canadian dollar hurts profits from its operations in the United States and Mexico. As well, slowing consumer spending and Internet competition could also hurt advertising revenue. However, small newspapers such as these are less vulnerable to competition from the Internet than larger newspapers. Transcontinental is a buy....
EMERA INC. $22 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 111.4 million; Market cap: $2.5 billion; SI Rating: Average) has commissioned its new wind power farm next to its Lingan generating station, the largest power plant in Nova Scotia. The Lingan wind farm will produce 42 gigawatts of electricity per year, or enough to supply 4,000 homes. Emera’s wind projects now supply around 60 megawatts per year, or 3% of its total capacity. If you include hydro and tidal power plants, Emera now gets 15% of its power from renewable sources. Wind power is less reliable than Emera’s conventional power plants. But projects like this will help Emera comply with new environmental laws that aim to cut harmful sulphur dioxide emissions....
FINNING INTERNATIONAL INC. $27 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 178.5 million; Market cap: $4.8 billion; SI Rating: Above average) has agreed to acquire Collicutt Energy Services Ltd., which makes and services gas compression equipment and power generators for oil and gas well operators in Western Canada. The $145 million price, payable in cash and stock, is equal to 69% of the $209.6 million or $1.16 a share that Finning earned in the first nine months of 2007. The deal gives Finning a large manufacturing facility in Red Deer, Alberta, as well as Collicutt’s skilled workforce. Finning estimated it will save up to $12 million by acquiring Collicutt rather than building similar new facilities. The purchase will also help Finning reach its goal of doubling its parts and service business by 2010. Finning is a buy.
PETRO-CANADA $55 (Toronto symbol PCA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 485.2 million; Market cap: $26.7 billion; SI Rating: Average) plans to increase capital spending in 2008 to $5.3 billion, up 28% from 2007. About two-thirds of this will go to growth projects, such as its Fort Hills oil sands project and the expansion of its Libyan operations. The remaining third will go to replacing reserves in core areas and enhancing existing assets. These investments should expand Petro-Canada’s daily oil production, from 390,000 barrels in 2007 to 420,000 barrels in 2008, and help it take advantage of rising oil prices. The company’s recent repurchase of hedging contracts covering production at the 29.9%-owned Buzzard oil platform in the North Sea should also spur earnings....
Bank stocks have moved down in the past few months, mainly because of concerns over a general lack of liquidity for securities backed by risky assets, such as subprime mortgages in the United States. This lack of liquidity makes it difficult to assess the market value of these securities, and has led to significant writedowns. Canada’s big five banks remain well capitalized, so these charges shouldn’t hurt their strong profit and dividend outlook. They’re still cheap in relation to earnings, and provide above-average yields. Investors should own at least one of these five banks in the Finance segment of their portfolio. CANADIAN IMPERIAL BANK OF COMMERCE $69 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 335.0 million; Market cap: $23.1 billion; SI Rating: Above average) is Canada’s fifth-largest bank, with assets of $342.2 billion....
Market weakness early in 2008 unsettled investors who are believers in the so-called ‘January barometer’ — the idea that January’s performance provides a clue to understanding the stock market for the rest of the year. However, this indicator is something of a self-fulfilling prediction, because it lumps January’s results in with results of the remaining 11 months. If the market goes up 5% in January, it has a big head start on a gain for the year. It could fall 4.5% in the remaining 11 months and still come up a gainer. That’s just one more illustration of why we never put much faith in any one indicator or set of statistics....
Home Capital is a leader in its field of first mortgage lending to Canadian borrowers who do not meet the lending requirements of major banks. However, Home Capital’s conservative lending practices have let it avoid the subprime mortgage problems that have hurt similar lenders in the United States. For example, as part of the company’s assessment process, its employees personally interview applicants to obtain relevant information that may be missed by credit bureau scores and conventional loan application forms. We still feel that conservative investors should maintain the bulk of their Finance sector holdings in major companies we recommend, including the big-five banks. However, investors willing to take on a little more risk should consider shares of Home Capital. The stock is attractively priced in relation to its prospects. It also has no exposure to the asset-backed credit problems of many other financial services stocks. HOME CAPITAL GROUP INC. $38 (Toronto symbol HCG; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 34.5 million; Market cap: $1.3 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....
SAPUTO INC. $28.15, Toronto symbol SAP, has agreed to buy the operations of Wisconsin-based Alto Dairy Cooperative, which makes cheeses under a variety of brand names and private labels. The $160 million U.S. price is 22% more than the $131.0 million (Canadian) or $0.63 a share that Saputo earned in the six months ended September 30, 2007. The new operations should expand revenue at Saputo’s U.S. operations by 20%. The company has a strong history of successfully integrating new operations, which helps cut the risk of expanding through acquisitions. Saputo is a buy....
My guess is that we are now closer to the end of a market downturn than the start of one. However, you need to distinguish between the two main kinds of market downturn. One is the stereotypical bear market – the kind of long-term decline that drags on for a year or more and is generally accompanied by a painful recession and a deep fall in stock prices. Our last bear market took place from mid-2000 through the last quarter of 2002, after the Internet boom of the late 1990s went bust. In that period, the Toronto index fell from 11,300 to 5,800. The other type of downturn, the so-called correction, may also be accompanied by a recession, and can also do a lot of damage to stock prices. However, a correction generally ends in less than a year, sometimes a lot less....