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: 640.8 million; Market cap: $25.6 billion; SI Rating: Above average) provides a wide range of specialized information to professionals in the financial, tax and accounting, medical, legal and scientific fields. Over 80% of Thomson’s revenue comes from electronic products, which cuts its printing and distribution costs. As well, 80% of its revenue comes from subscription-based products, which cuts its reliance on cyclical advertising. In May 2007, Thomson agreed to acquire UK-based Reuters Group plc for $17 billion in cash and stock (all amounts except share price and market cap in U.S. dollars)....
We’ve added seven new stocks to our Aggressive Growth Portfolio. While riskier than many of our recommendations, these seven are leaders in their fields, and attractively priced in relation to their prospects. Conservative investors should limit stocks like these to no more than a third of their portfolio. PRECISION DRILLING TRUST $16 (Toronto symbol PD.UN; Aggressive Growth Portfolio, Resources sector; Units outstanding: 125.8 million; Market cap: $2.0 billion; SI Rating: Extra risk) is Canada’s largest provider of drilling and related services to the oil and gas industry. Precision’s drilling fleet consists of 259 land drilling rigs. In the third quarter of 2007, Precision’s revenue fell 34.8%, to $227.9 million from $349.6 million a year earlier. Earnings per unit fell 48.1%, to $0.55 from $1.06. Cash flow per unit fell 46.5%, to $0.68 from $1.27. Lower natural gas prices have cut demand for drilling services in Precision’s core markets in Western Canada. Rising natural gas inventories have also hurt rig demand....
TIM HORTONS INC. $38 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 187.1 million; Market cap: $7.1 billion; SI Rating: Average) earned $0.36 a share in the third quarter of 2007, up 33.3% from $0.27 a year earlier. Sales grew 18.6%, to $490.5 million from $413.6 million, due to the opening of 40 new restaurants, successful new menu items and higher selling prices. Same-store sales rose 7.5% in Canada, and 4.5% in the United States. The company recently completed its plan to buy back $200 million worth of its shares. It now aims to repurchase an additional $200 million over the next year. In light of Tim Hortons’ expanding sales and profits, we’ve upgraded its SI Rating, from “Extra risk” to “Average”....
AGRIUM INC. $55 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; Shares outstanding: 134.0 million; Market cap; $7.4 billion; SI Rating: Average) has gained 60% in the past year, as rising crop prices, and the politically inspired ethanol boom, have pushed up fertilizer demand and prices. Agrium has also benefited from a recent flood at a potash mine in Russia, owned by rival fertilizer producer Silvinit. Potash supplies 15% of Agrium’s profits, and a long disruption at Silvinit could potentially double prices. In the three months ended September 30, 2007, Agrium’s earnings soared to $0.38 a share from $0.01 a year earlier (all amounts except share price and market cap in U.S. dollars). That’s mainly because production problems in the year-earlier quarter cut output and raised costs. Revenue grew 20.5%, to $989 million from $821 million....
CANADIAN TIRE CORP. $74 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.6 million; Market cap: $6.0 billion; SI Rating: Above average) earned $1.30 a share before unusual items in the third quarter of 2007, up 12.1% from $1.16 a year earlier. The gains came mainly from cost savings, as same-store sales at its core Canadian Tire stores fell 2.7%. Warmer-than-usual weather in central Canada hurt demand for fall and winter goods. However, overall revenue rose 1.5%, to $2.05 billion from $2.02 billion. The stock has moved down from its recent peak of $87 on fears of softening retail conditions in Ontario and Quebec, which account for 65% of the company’s total revenue. However, higher oil prices will improve profits at Canadian Tire’s gas stations. Earnings are also growing strongly at its financial operations. Canadian Tire should earn $4.75 a share in 2007, which implies a p/e of 15.6. The $0.74 dividend yields 1.0%....
MANITOBA TELECOM SERVICES INC. $44 (Toronto symbol MBT; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 64.6 million; Market cap: $2.8 billion; SI Rating: Average) earned $0.73 a share (total $47.7 million) in the third quarter of 2007, up 17.7% from $0.62 a share ($42.2 million) a year earlier. These figures exclude restructuring costs and other unusual items. Most of the gains came from cost cuts since revenue fell slightly to $475.9 million from $477.9 million. The company has suspended its plan to buy back $320 million worth of its shares. Manitoba Tel spent $172.9 million on share repurchases in the first nine months of 2007. The $2.60 dividend still seems safe, and yields 5.9%. Communication regulators aim to auction off wireless frequencies (called ‘spectrum’ in the industry) in 2008, and Manitoba Tel wants to conserve cash for a possible bid. Unlike other bidders, Manitoba Tel could use parts of its Allstream national business communication network to carry traffic instead of building a new system from scratch. As well, Manitoba Tel would probably team up with partners to cut its risk....
TRANSALTA CORP. $33 (Toronto symbol TA; Conservative Growth Portfolio; Utilities sector; Shares outstanding: 202.2 million; Market cap: $6.7 billion; SI Rating: Average) continues to profit from rising power demand in Alberta, which accounts for 58% of its generating capacity. In the three months ended September 30, 2007, power production grew 2.7% from a year earlier. That helped increase revenue 8.5%, to $711.6 million from $656.0 million. Earnings per share before unusual items jumped 77.8%, to $0.32 from $0.18. Cash flow per share rose 23.1%, to $0.80 from $0.65. TransAlta trades at 26.6 times its likely 2007 earnings of $1.24 a share. That’s a higher p/e than Fortis, since investors expect faster growth from TransAlta because it focuses on unregulated power plants. TransAlta’s $1.00 dividend yields 3.0%....
It pays to take a skeptical view of companies that rely on acquisitions for growth. But Fortis’s two big purchases in 2004 and this year — at a total cost of $5.2 billion — gave it more stable revenue streams, and cut its geographic risk. Earnings will likely grow slowly for the next year or two while the company completely absorbs its new assets. But the new businesses improve Fortis’s long-term prospects. FORTIS INC. $28 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 154.9 million; Market cap: $4.3 billion; SI Rating: Above average) owns and operates electrical power plants in Newfoundland, Prince Edward Island, Ontario, Alberta and British Columbia. It also invests in power projects in the United States and the Caribbean....
In this month’s issue, you’ll find seven new buys which we first recommended in our service for aggressive investors, Stock Pickers Digest. Their subsequent gains ranged as high as 1,920.0%, but we feel each of them has further gains ahead. The Successful Investor has two main goals. First, we explain our 3-pronged investment approach, which consists of investing mainly in well-established companies, spreading your investments out across the five main economic sectors, and downplaying investments that are in the broker/media limelight. Second, we provide you with conservative investment recommendations that you can use to implement our investment approach....
GENNUM CORP. $9.81 (Toronto symbol GND) earned $0.10 a share from ongoing operations in its third fiscal quarter ended August 31, 2007, down 16.7% from $0.12 a year earlier. Sales rose slightly, to $28.6 million from $28.4 million. That’s despite the stronger Canadian dollar, which cut revenue in the latest quarter by $1.8 million. Gennum is making good progress on its plan to sell less-profitable operations to focus on its higher-margin business, such as TV broadcasting equipment. The company continues to spend over 30% of its revenue on research, so it’s more profitable than it seems. It’s also debt free, and has $1.28 a share in cash. Buy. SHAWCOR LTD. $37 (Toronto symbol SCL.A) has won an $85 million U.S. contract to provide pipeline coating services to a liquefied natural gas facility in Western Australia. That’s small next to ShawCor’s annual revenues of over $1 billion (Canadian), but it enhances the company’s reputation in Australia. Buy. PENGROWTH ENERGY TRUST $18 (Toronto symbol PGF.UN) recently cut its monthly distributions by 10% to conserve cash for new projects and possible acquisitions. That will help replenish its reserves, which should last 10 years under current production rates. New hedging contracts also cut its exposure to volatile oil and gas prices. Pengrowth’s units still yield a high 15.0%. Buy.