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
We’ve changed our view on Agrium Inc. We still like Agrium’s long-term outlook, but it has gone up so much that we now see it as a hold, rather than our #1 choice as Resource Stock for 2007. IMPERIAL OIL LTD. $50 (Toronto symbol IMO; Conservative Growth Portfolio, Resources sector; Shares outstanding: 929.2 million; Market cap: $46.5 billion; SI Rating: Average) is looking more attractive. Imperial is Canada’s largest integrated oil company. Imperial gets 70% of its revenue from refining crude oil into gasoline and other fuels, but just 30% of its profit. The remaining revenue and profit come from oil production....
All five of Canada’s biggest banks have been exceeding investor expectations since at least the mid-1990s. Investors always worry too much about the impact on the banks of each new ripple in interest rates and business statistics. Bank profits and loan losses do go through swings, of course. In the late 1990s, banks suffered along with the economic turmoil in Asia. Early in this decade, they suffered due to problems in telecom and other areas. But when the problems end, you’ll find the banks have managed to contain their losses and have begun a new profit expansion. All five banks are still cheap in relation to earnings, and they provide above-average yields. Every Canadian investor should own one of them, if not several....
CAE INC. $14 (Toronto symbol CAE) has opened a new $100 million U.S. pilot training centre in New Jersey. The company will also install $60 million U.S. worth of new flight simulators at this site. To put these costs in perspective, CAE earned $129.3 million (Canadian) or $0.51 a share before unusual items in the fiscal year ended March 31, 2007. However, problems in the U.S. airline industry and the rising Canadian dollar could hurt CAE’s growth. Hold. CANADIAN PACIFIC RAILWAY CO. $75 (Toronto symbol CP) has reached a new three-year deal with its unionized track workers that will end a three-week strike. The company did not reveal the specifics of the new contract, but labour peace helps cut CP’s risk. Buy. TECK COMINCO LTD. $48 (Toronto symbol TCK.B) is helping junior mineral exploration company Benton Resources Corp. develop a new nickel-copper find 60 km north of the massive Voisey’s Bay nickel deposit in Labrador. There’s no guarantee the project will make money, but deals like this give Teck a low-risk way to participate in promising new discoveries. Buy....
CANADIAN NATIONAL RAILWAY CO. $56 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 510.2 million; Market cap: $28.6 billion; SI Rating: Average) operates a 32,000-km freight railway network across Canada, and south to the Gulf of Mexico. It hauls a variety of goods, including oil, metals, grain, forest products and manufactured products. CN’s revenue fell from $6.1 billion in 2002 to $5.9 billion in 2003, but grew to $7.7 billion in 2006 partly due to acquisitions. Per-share profits rose from $0.91 in 2002 to $3.40 in 2006.
Prince Rupert has big growth potential
Perhaps CN’s most important purchase in the past few years was BC Rail Ltd. The deal expanded CN’s presence in Western Canada, and gave it exclusive rail access to the port of Prince Rupert, which is closer to Asia than other west coast ports....
ANDREW PELLER LTD. $11 (Toronto symbol ADW.A; Income Portfolio, Consumer sector; Shares outstanding: 14.9 million; Market cap: $163.9 million; SI Rating: Average) earned $0.65 a share in its fiscal year ended March 31, 2007, up 54.8% from $0.42 in the prior year. If you exclude unusual items in both years, income would have grown 7.3%. Sales rose 7.7%, to $228.2 million from $211.8 million. The company continues to expand its premium wine operations, which generate higher profits than its regular wines. Consequently, Peller’s gross margin rose to 41.7% in fiscal 2007 from 40.4% in 2006. That let it raise its quarterly dividend 18.5%, from $0.0633 a share to $0.075. The new annual rate of $0.30 yields 2.7%. Andrew Peller is a buy.
ARBOR MEMORIAL SERVICES INC. $28 (Toronto symbol ABO.A; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 10.6 million; Market cap: $296.8 million; SI Rating: Average) earned $0.66 a share in its second fiscal quarter ended April 30, 2006, up 8.2% from $0.61 a year earlier. Revenue grew 7.4%, to $59.8 million from $55.7 million, due to higher sales at its funeral division. Arbor is a buy for aggressive investors. TRANSALTA CORP. $27 (Toronto symbol TA; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 202.6 million; Market cap: $5.5 billion; SI Rating: Average) has no plans to purchase affiliate TransAlta Power L.P., which is now trying to boost investor value through a sale due to Ottawa’s plan to tax income trusts. TransAlta Power owns 49.99% of five gas-fired power plants in Ontario, Saskatchewan and Alberta; TransAlta owns the remaining 50.01% and runs the plants....
SHAWCOR LTD. $29 (Toronto symbol SCL.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 73.7 million; Market cap: $2.1 billion; SI Rating: Average) is building a $38 million facility in Camrose, Alberta to take advantage of growing demand for its pipeline coating services in the oil sands region. The company has now paid an undisclosed sum for land next to this new plant, which will increase its storage capacity and efficiency. ShawCor is a buy for aggressive investors. IMPERIAL OIL LTD. $50 (Toronto symbol IMO; Conservative Growth Portfolio, Resources sector; Shares outstanding: 939.6 million; Market cap: $47.0 billion; SI Rating: Average) has moved up in the past few weeks, partly due to rumours that parent company ExxonMobil Corp. is considering buying the 30% of Imperial that it does not already own....
MOLSON COORS CANADA INC. (Toronto symbols TPX.A $97 and TPX.B $99; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 127.8 million; Market cap: $12.5 billion; SI Rating: Average) earned $0.28 a share before special items in the first quarter of 2007, compared with a loss of $0.01 a year earlier (all amounts except share price in U.S. dollars). Most of the gains came from the company’s cost cutting. Sales rose 7.0%, to $1.23 billion from $1.15 billion, thanks to higher prices and better promotion of its core brands. The stock got as high as $110 in April, but has moved down lately. Still, it’s up roughly 30% in the past year. It now trades at around 18 times its forecast 2007 profit of $5.16 U.S. a share, and at 1.4 times its sales of $68 U.S. a share. Growing speculation that the company may merge with larger brewer SABMiller PLC could drive the stock higher. However, such a deal would face regulatory hurdles in several countries. The high degree of control that the Molson and Coors families exert also makes a takeover more difficult....
CANADIAN IMPERIAL BANK OF COMMERCE $98 (Toronto symbol CM; Conservative Growth Portfolio, Finance sector; Shares outstanding: 337.5 million; Market cap: $33.1 billion; SI Rating: Above average) is the target of a $600 million class-action lawsuit accusing the bank of failing to pay overtime to 10,000 current and former employees. It will take about a year to come to trial. This is the largest overtime class-action lawsuit ever filed in Canada, but it is small compared to similar U.S. suits. Any award is likely to be modest in relation to the bank’s earnings, which were $807 million or $2.27 a share in its second fiscal quarter ended April 30, 2007. Even if CIBC settles out of court, the suit will undoubtedly change the way it runs its business, and increase its labour costs. But other banks will face the same added costs to stay competitive....
MAPLE LEAF FOODS INC. $16 (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 127.2 million; Market cap: $2.0 billion; SI Rating: Average) is a leading producer of fresh and frozen meat products. It also owns 88% of Canada Bread (see at right). At current prices, Canada Bread accounts for around $10 of each Maple Leaf share. That means the company’s remaining businesses, which provide 75% of its sales, are trading at around $6 a share. Maple Leaf’s core businesses are less profitable than Canada Bread’s. However, its broader range of revenue sources cuts its long-term risk. Maple Leaf’s plan to scale back its fresh meat operations and focus on value-added branded meat products also adds to its appeal....