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
BCE INC. $36.29, Toronto symbol BCE, is trading nearly 15% below the $42.75-a-share takeover offer it accepted in July 2007. This is partly 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. This group has also lined up loans from several banks, but recent writedowns of U.S. subprime mortgages have raised fears that these banks may withdraw or cut their involvement. However, lower interest rates will cut the buyers’ costs. The drop in BCE suggests that the takeover is unlikely to go through. But at the current reduced price, BCE is once again an attractive buy for income and growth....
I’d choose ‘Buy’ Many members of my Inner Circle have asked the same question this week: Is it time to buy? If I had to choose between “Buy” and “Sell”, I’m going to say “Buy”, by a big margin....
Today many people seem sure that the subprime situation and associated problems will bring on a long-term market decline that could carry stock prices much lower. When conclusions like these become widespread, the conclusion or the timing or both are often wrong. Think back to how many people agreed with former Federal Reserve Board Chairman Alan Greenspan’s famous (or notorious) ‘irrational exuberance’ speech, in December, 1996. Yet nearly four years passed before the market hit its ultimate peak. In between the Greenspan speech and 2000 market peak, we went through a market setback in response to an economic crisis that started in Thailand in 1997....
CANADIAN IMPERIAL BANK OF COMMERCE $71.31, Toronto symbol CM; moved down this week due to growing uncertainty over hedges it purchased from troubled U.S. bond insurer ACA Financial Guaranty Corp. These hedges are intended to protect CIBC from U.S. subprime mortgage losses, but ACA may not be able to meet its obligations. CIBC has already written off about $1 billion of its U.S. subprime-related securities, and could face further charges of roughly $2 billion. CIBC earned $3.1 billion or $9.24 a share in the year ended October 31, 2007, excluding unusual charges. The bank remains well capitalized, which reduces the possibility it will have to issue new equity. It’s also selling its riskier operations, and doing a good job controlling costs....
AGRIUM INC. $72.10, Toronto symbol AGU, has gained nearly 25% in the past month, partly due to a new energy bill in the United States that mandates a five-fold increase in the production of biofuels by 2022. As a major supplier of fertilizers, Agrium should profit from higher production of crops, such as corn, for use in ethanol production. The new bill may also help Agrium re-open its plant in Kenai, Alaska, which it recently shut down due to a lack of natural gas supplies. Agrium is studying a plan to convert coal into natural gas, and could receive subsidies that would offset the costs of a new facility. However, relying on the largely politically inspired ethanol boom for growth adds to Agrium’s risk. The company is also vulnerable to rising natural gas prices....
IGM FINANCIAL INC. $51 (Toronto symbol IGM) reported $123.2 billion in assets under management at November 30, 2007, up 5.5% from $116.8 billion a year earlier. That’s good news, since IGM bases its fees on the value of its clients’ assets. IGM also sold $85.6 million worth of new mutual funds in November 2007, net of redemptions. Mutual fund sales should rise as the RRSP contribution deadline of February 29, 2008 approaches. Buy. MANITOBA TELECOM SERVICES INC. $45 (Toronto symbol MBT) may bid for new cellular phone frequencies that Ottawa plans to auction off later this year. To cut costs, Manitoba Tel would likely form a strategic partnership with another bidder or a foreign cell phone company. Meanwhile, the company predicted its earnings in 2008 would range from $2.95 a share to $3.15 per share. The stock trades at 14.8 times the midpoint of that range. Buy. MOLSON COORS CANADA INC. $53 (Toronto symbols TPX.A and TPX.B) currently distributes Corona and other beers made by Mexican brewer Grupo Modelo in Ontario, Quebec and Atlantic Canada. A new deal will expand Modelo’s brands to all of Canada. This will help Molson Coors profit from rising demand for premium imported beers. Buy.
BOMBARDIER INC. (Toronto symbols BBD.A $6.04 and BBD.B $6.07; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.75 billion; Market cap: $10.6 billion; SI Rating: Extra risk) continues to win new orders for its aircraft and railcars. Its total backlog is now a record $51.6 billion, or just over three years’ revenue (all amounts except share price and market cap in U.S. dollars). Meanwhile, Bombardier’s earnings in its third fiscal quarter ended October 31, 2007 rose 66.7%, to $0.05 a share (total $91 million) from $0.03 a share ($53 million) a year earlier. Revenue grew 23.5%, to $4.2 billion from $3.4 billion. Besides the strong earnings, the stock moved up after Bombardier confirmed it has had discussions with a Russian company regarding a possible investment in Bombardier’s railcar division. While a deal is far for certain, the company earns higher profits from aircraft sales than trains, so selling part of the train operation would improve its overall profitability....
MDS INC. $19 (Toronto symbol MDS; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 122.5 million; Market cap: $2.3 billion; SI Rating: Average) is now 16.8% owned by activist investor ValueAct Capital Management LLC. That’s up from 6.6% in May, 2007. ValueAct will likely spur MDS to move more aggressively with its current restructuring plan. Meanwhile, MDS has agreed to sell two of its product lines for an undisclosed sum. These businesses, which make radiation equipment that sterilize blood and treat cancer, account for 3% of MDS’s annual revenue. The sale will let MDS focus on its more promising medical isotope business. MDS is still a hold....
BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $30 (Toronto symbol BA.UN; Conservative Growth Portfolio, Utilities sector; Units outstanding: 127.1 million; Market cap: $3.8 billion; SI Rating: Above average) transferred the bulk of its wireless business to BCE Inc. as part of the deal that created the trust. Without these operations, the fund now aims to spur growth by expanding the availability and capacity of its high-speed Internet service. Bell Aliant now plans to launch high-speed Internet service in 24 communities in Nova Scotia in 2008. It also plans to add more wireless high-speed access spots in urban areas. Expanding high-speed availability will help Bell Aliant hang on to customers, and encourage them to buy more services such as digital TV. New revenue streams will also help it keep paying monthly distributions of $0.235 a unit (9.4% yield)....
The shares of Canada’s two big railways, CN and CP, have moved down in the past six months due to concerns that the high Canadian dollar would hurt export volumes. However, both are taking advantage of the high dollar to expand their operations in the United States. While these acquisitions have run into opposition from environmental groups and others, they should eventually win regulatory approval. CANADIAN NATIONAL RAILWAY CO. $51 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 494.5 million; Market cap: $25.2 billion; SI Rating: Above average) has agreed to buy a major portion of a 319-km railway near Chicago for $300 million U.S. The company also plans to invest $100 million U.S. to expand capacity on the new line. To put these figures in context, CN earned $485 million (Canadian) or $0.96 a share in the third quarter of 2007. This lightly used line would let CN bypass heavy rail traffic in Chicago. However, the company’s plan to increase volume on these tracks has encountered strong opposition from local municipalities. CN had hoped to complete the purchase in early 2008. But an environmental review could delay the transaction by about 18 months....