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
CANADA BREAD COMPANY LTD. $67 (Toronto symbol CBY; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 25.4 million; Market cap: $1.7 billion; SI Rating: Above average) has shot up to record highs lately thanks to strong earnings growth and its expanding international prospects. The company makes a wide range of fresh and frozen baked goods. It also makes specialty pasta and sauces. Major brands include Dempster’s, Olafson’s and Olivieri. Canada Bread is focusing on expanding its operations outside of Canada, which now provide roughly 25% of its total revenue. In August 2007, it paid $40 million for La Fornaia Ltd., which sells premium, hand-crafted breads through major retailers in the UK and Europe. In the United States, Canada Bread recently paid $10 million U.S. for a plant in Washington State. As well, a plan to expand its warehouse in Virginia should cut its distribution costs. In the three months ended September 30, 2007, earnings before unusual items rose 13.7%, to $0.83 a share (total $21.1 million) from $0.73 a share ($18.5 million) a year earlier. Revenue grew 12.7%, to $385.8 million from $342.3 million. Excluding acquisitions, revenue grew 4%....
MAPLE LEAF FOODS INC. $14 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 129.1 million; Market cap: $1.8 billion; SI Rating: Average) is Canada’s leading supplier of fresh and frozen meat products. Major brands include Maple Leaf and Schneiders. In July 2007, Maple Leaf sold its animal feed operations as part of a major restructuring plan to focus on its more profitable value-added food businesses. Maple Leaf used the gross proceeds of $525 million to pay down its long-term debt, from $1.2 billion at the end of 2006 to $845.4 million at September 30, 2007. That’s still high at 60% of Maple Leaf’s market cap, but reasonable in light of the company’s well-known brands and improving long-term prospects....
TRANSCONTINENTAL INC. $18 (Toronto symbol TCL.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 84.5 million; Market cap; $1.5 billion; SI Rating: Average) will restate its earnings to correct two accounting errors. It originally reported earnings for the year ended October 31, 2006 of $134.3 million or $1.54 a share, excluding restructuring costs. These restatements will cut Transcontinental’s 2006 earnings by $10 million, and by a further $10 million in prior years. The restatements grow out of the size and timing of estimated expenses like inter-company transactions and depreciation. They do not involve cash outlays like employees’ salaries, so they will have no effect on Transcontinental’s cash flow or cash balances. Transcontinental’s stock has moved down from $21 in November, 2007, mainly due to concerns that an economic slowdown would hurt advertising revenue at its newspapers and flyer-printing businesses. The company’s U.S. and Mexican operations supply 30% of its revenue, so it’s also vulnerable to a rising Canadian dollar. However, recent investments in new plants and printing equipment will help bring Transcontinental’s operating costs down....
AGRIUM INC. $60 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 134.0 million; Market cap: $8.0 billion; SI Rating: Average) has agreed to buy publicly traded UAP Holding Corp., which sells seeds and other agricultural products to North American farmers through 370 distribution and storage facilities. The $2.65 billion price is high compared to the $269 million or $2.01 a share that Agrium earned in the nine months ended September 30, 2007 (all amounts except share price and market cap in U.S. dollars). So to pay for the purchase, the company will issue $1.25 billion worth of new shares. Agrium feels the merger will let it cut its annual expenses by $115 million by 2010. UAP will give Agrium steadier revenue streams, and cut its reliance on bulk fertilizer sales. However, Agrium needs natural gas to make its fertilizers, so it’s still vulnerable to rising gas prices....
Energy prices are inherently volatile. So it’s a good idea to focus on well-established oil and gas stocks that can withstand the inevitable price setbacks — and prosper anew when prices rebound. Here is our analysis of three of our long-term favourites. IMPERIAL OIL LTD. $52 (Toronto symbol IMO; Conservative Growth Portfolio, Resources sector; Shares outstanding: 914.2 million; Market cap: $47.5 billion; SI Rating: Average) is Canada’s largest integrated oil company. Imperial also operates 2,000 retail gas stations under the “Esso” banner. ExxonMobil Corp. owns 69.6% of Imperial’s stock. Imperial continues to invest heavily in new oil and gas projects. For example, it recently received regulatory approval to proceed with its Kearl Lake oil sands project, which contains roughly 4.6 billion barrels. That’s equal to 34% of Imperial proved and non-proved reserves of 13.5 billion barrels. Imperial owns 70% of Kearl Lake, while ExxonMobil owns the remaining 30%....
PENGROWTH ENERGY TRUST $18 (Toronto symbol PGF.UN; Aggressive Growth Portfolio, Resources sector; Units outstanding: 246.1 million; Market cap: $4.4 billion; SI Rating: Average) produces oil and natural gas from properties in Alberta and British Columbia. It also owns 8.4% of the Sable Offshore Energy Project, which extracts natural gas from several fields south of Nova Scotia. Oil accounts for 49% of Pengrowth’s production, while natural gas supplies the remaining 51%. Pengrowth focuses on high quality, mature properties that generate plenty of steady cash flows. It also prefers to replenish its reserves with acquisitions instead of exploration. Growing by acquisition adds risk. But Pengrowth would rather replace its reserves with proven properties that immediately add to its cash flow, instead of investing in uncertain exploration projects....
Pengrowth is down from its highs lately along with most other oil and gas trusts. However, we feel it has dropped enough to reflect today’s lower natural gas prices, ongoing volatility in crude oil markets and investor worries about further distribution cuts. Pengrowth is an attractive buy for the Resources component of your portfolio. PENGROWTH ENERGY TRUST $18 (Toronto symbol PGF.UN; Aggressive Growth Portfolio, Resources sector; Units outstanding: 246.1 million; Market cap: $4.4 billion; SI Rating: Average) produces oil and natural gas from properties in Alberta and British Columbia. It also owns 8.4% of the Sable Offshore Energy Project, which extracts natural gas from several fields south of Nova Scotia. Oil accounts for 49% of Pengrowth’s production, while natural gas supplies the remaining 51%. Pengrowth focuses on high quality, mature properties that generate plenty of steady cash flows. It also prefers to replenish its reserves with acquisitions instead of exploration....
CANADIAN IMPERIAL BANK OF COMMERCE $92 (Toronto symbol CM) now plans to take a $302 million (after-tax) charge to write down various securities tied to the U.S. mortgage market. When added to an earlier writedown, CIBC will have written off half of its $1.7 billion portfolio of these securities. However, a $381 million (after-tax) gain from the restructuring of the Visa credit card system will help offset these writedowns. Buy. TORONTO-DOMINION BANK $68 (Toronto symbol TD) estimates that the restructuring of the Visa credit card business will add $135 million to its after-tax earnings in the fourth quarter ended October 31, 2007. That’s equal to 12% of the $1.2 billion or $1.60 a share it earned before one-time items in its third fiscal quarter. Buy. ANDREW PELLER LTD. $10 (Toronto symbol ADW.A) earned $2.7 million in its second fiscal quarter ended September 30, 2007, up 3.9% from $2.6 million a year earlier. Earnings per share were unchanged at $0.18. Sales rose 3.0%, to $61.2 million from $59.4 million. The company is also benefiting from the rising Canadian dollar, which has cut the cost of grapes and wine it buys in international markets. Buy.
NOVA CHEMICALS CORP. $31 (Toronto symbol NCX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 83.1 million; Market cap: $2.6 billion; SI Rating: Extra risk) makes two types of industrial plastics. Ethylene/polyethylene is used in a wide variety of products, such as plastic bags, automotive parts, appliances and electronics. This business supplies 60% of Nova’s revenue. The remaining 40% comes from styrene products such as foam cups. Nova is riskier than most stocks on our Conservative Growth Portfolio. It’s highly cyclical and needs large amounts of crude oil and natural gas to make its products, which exposes it to rising energy prices.
Low costs give Nova an edge
However, Nova has several advantages over its competitors. Its ethylene/polyethylene plant in Joffre, Alberta is the world’s largest, and economies of scale help keep its operating costs low. The proximity to Alberta’s large natural gas reserves also helps keep input costs down....
EMERA INC. $21 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 111.4 million; Market cap: $2.3 billion; SI Rating: Average) earned $0.37 a share in the three months ended September 30, 2007, more than double the $0.18 a share it earned a year earlier. The bulk of the increase was due to a one-time tax gain at Nova Scotia Power Inc., Emera’s biggest subsidiary. Revenue rose 13.9%, to $310.3 million from $272.4 million, mainly due to higher electricity rates. Damage from Tropical Storm Noel in November cut power to roughly 20% of Emera’s customers in Nova Scotia for up to three days. However, it’s unlikely that the repair costs will hurt Emera’s ability to maintain its $0.91 dividend, which yields 4.3%. Emera is a buy....