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
EMERA INC. $20 (Toronto symbol EMA; Income Portfolio, Utilities sector; Shares outstanding: 111.2 million; Market cap: $2.2 billion; SI Rating: Average) operates over 40 power plants that supply electricity to roughly 460,000 customers in Nova Scotia. This operation accounts for 85% of its total revenue, and most of its income. To cut its reliance on Nova Scotia, Emera acquired Bangor Hydro in 2001. This subsidiary buys power from various producers and distributes it to over 110,000 customers in eastern Maine. Emera also invests in other energy projects. For example, it recently acquired 19% of the main electrical utility on the Caribbean island of St. Lucia. Emera already owns 12.9% of the Maritimes & Northeast Pipeline, which transports natural gas from the Sable Island reserves south of Nova Scotia to markets in Canada and the Northeastern U.S....
TECK COMINCO LTD. $51 (Toronto symbol TCK.B; Conservative Growth Portfolio, Resources sector; Shares outstanding: 419.3 million; Market cap: $21.4 billion; SI Rating: Average) continues to use its strong cash flow to cut its reliance on zinc, which accounts for a third of its revenue. It recently acquired copper producer Aur Resources Ltd., which will double its copper production. The company has also increased its ownership in Fording Canadian Coal Trust, from 8.7% to 19.95%, and its stake in the Fort Hills oil sands project, from 15% to 20%. These moves cost Teck over $5 billion in cash and stock. All of Teck’s commodities are priced in U.S. dollars, so the strong Canadian dollar will probably cut its 2007 earnings by roughly $0.15 a share. Still, Teck should earn $5.16 a share in 2007, and the stock trades at just 9.9 times that figure. Teck’s new investments should also give it more cash to increase its $1.00 dividend, which yields 2.0%. Teck Cominco is a buy.
LOBLAW COMPANIES LTD. $45 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 274.2 million; Market cap: $12.3 billion; SI Rating: Above average) offered discounts on purchases over $100 in the week before Thanksgiving. The company hopes promotions like this will help it compete with Wal-Mart’s new low-cost supermarkets. In the short term, however, the plan will hurt Loblaw’s profit margins. Loblaw is still a hold. BOMBARDIER INC. (Toronto symbols BBD.A $6.01 and BBD.B $5.99; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $10.2 billion; SI Rating: Extra risk) recently recommended that airlines ground older models of one of its planes, due to possible problems with their landing gear. About 90% of these planes are now back in service....
ENCANA CORP. $62 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 752.8 million; Market cap: $46.7 billion; SI Rating: Average) will cut its 2008 capital spending plans in Alberta by 40% if the Alberta government adopts in full its proposals to raise oil and gas royalties. EnCana focuses on early-stage gas properties, so higher royalties would make some new projects uneconomical to develop. The company has already trimmed its capital spending plans for this year due to falling natural gas prices and shortages of labour and drilling equipment. Our view is that gas prices will eventually rebound, which should help offset higher royalties. Meanwhile, EnCana could speed up development of its projects outside of Alberta, like its proposed Deep Panuke offshore gas field south of Nova Scotia. That would help it maintain current production levels....
The Alberta government is studying proposals to raise royalties on oil and gas developments. That could slow the expansion of the oil sands. However, at current production rates, oil sands reserves should last 200 years, so it’s unlikely higher royalties will scare off developers. As well, further increases in oil prices may more than offset higher royalties. Finning and SNC-Lavalin should continue to profit from various oil sands projects. But only one is a buy right now. FINNING INTERNATIONAL INC. $32 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 179.6 million; Market cap: $5.7 billion; SI Rating: Above average) sells and rents Caterpillar brand tractors, bulldozers and trucks....
MOLSON COORS CANADA INC. (Toronto symbols TPX.A $50 and TPX.B $56; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 179.3 million; Market cap: $10.0 billion; SI Rating: Average) has gained roughly a third in the past year, mainly due to its success in cutting costs following the merger of Molson and Coors in February 2005. The company now aims to cut costs by a further $500 million a year with an agreement to merge its operations in the United States and Puerto Rico with those of SAB Miller PLC (all amounts except share price and market cap in U.S. dollars). Molson Coors earned $1.02 a share (total $184.3 million) in the second quarter of 2007. Each will have 50% voting interest in new venture, called MillerCoors, but Miller will have a 58% economic interest while Molson Coors will have 42%. This new business will have 27% of the U.S. beer market. That should help it compete with Anheuser- Busch, which accounts for about half of U.S. beer sales. If regulators approve, MillerCoors should begin operations in 2008....
CANADIAN TIRE CORP. $84 (Toronto symbol CTC.A; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 81.5 million; Market cap: $6.8 billion; SI Rating: Above average) has enjoyed great success in the past few years with its Concept 20/20 stores, which feature wider aisles and a central customer service desk. The company is now modifying the Concept 20/20 format for smaller markets. It plans to bring forward an even newer format in 2009 to replace Concept 20/20. Canadian Tire is also building two pilot stores with full-sized Mark’s Work Wearhouse casual clothing stores inside them. Putting more clothing inside its regular stores should help Canadian Tire compete with Wal-Mart....
FPI LTD. $18 (Toronto symbol FPL; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 13.5 million; Market cap: $243.0 million; SI Rating: Speculative) plans to sell its remaining assets in two transactions. Ocean Choice International will buy FPI’s fish harvesting and processing operations in Atlantic Canada for $158.5 million. High Liner Foods Inc. will pay $143 million in cash and High Liner common and preferred stock for FPI’s North American marketing division. The sales require the approval of shareholders at a special meeting on October 22, 2007. The Newfoundland government must also approve the sales. Following these transactions, FPI’s remaining assets will consist of cash and the High Liner securities. The company plans to change its name to FP Resources Ltd., and aims to maintain its listing on the Toronto Exchange....
We feel most investors should hold the bulk of their investment portfolios in securities from wellestablished companies. However, you may also want to hold some aggressive stocks. Most of our aggressive recommendations have a strong hold on niche markets. This approach cuts your risk by zeroing in on companies like these five, whose strong long-term prospects will help them overcome the inevitable downturns. However, we see only four of them as buys at this time. ARBOR MEMORIAL SERVICES INC. $30 (Toronto symbol ABO.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 10.6 million; Market cap: $318.0 million; SI Rating: Average) owns 41 cemeteries, 27 crematoria, three reception centres located on cemetery premises and 93 funeral homes in eight provinces....
A member of my Inner Circle recently asked a question that many clients may have wondered about. “Have you ever felt like mortgaging the house to load up on an investment? If so, what was it and when? Also, considering the current correction, are you bullish longer term on any particular sector or is it too early to project that at this time?” The short answer to the first question is no. But we often do single out a ‘stock of the year’. When we like a stock enough to give it that status, we feel all our clients should own it, if it fits their investment objectives....