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
FORDING CANADIAN COAL TRUST $29 (Toronto symbol FDG.UN; Aggressive Growth Portfolio, Resources sector; Units outstanding: 147.5 million; Market cap: $4.3 billion; SI Rating: Average) has agreed to sell its wollastonite operations for $40 million. Manufacturers use wollastonite as a substitute for asbestos. To put that in context, Fording earned $0.53 a unit (total $77.7 million) from continuing operations in the first quarter of 2007, down 60.5% from $1.34 a unit ($196.5 million) a year earlier. Revenue fell 25.9%, to $350.5 million from $473.3 million, mainly due to a 19% drop in average coal prices. Harsh winter weather at Fording’s Elk Valley coal mine in B.C. also hurt deliveries. The lower coal prices forced Fording to cut its quarterly distribution, from $0.95 a unit to $0.65. The current implied annual rate of $2.60 yields 9.0%. Distributions should remain stable for the rest of 2007....
BOMBARDIER INC. (Toronto symbols BBD.A $4.82 and BBD.B $4.79; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $8.2 billion; SI Rating: Extra risk) estimates that demand for business jets will rise roughly 75% over the next decade, based on order backlogs and growing orders from international customers. Demand for regional jets is also improving, particularly for larger, more fuel-efficient models such as Bombardier’s new 100-seat plane. The outlook for the company’s transportation division is also getting brighter. It recently won new contracts to supply trains for public transportation systems in the UK and Shanghai, China. Bombardier is a buy. The multiple voting ‘A’ shares are the better choice....
TIM HORTONS INC. $35 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 190.5 million; Market cap: $6.7 billion; SI Rating: Extra risk) is developing overseas partnerships. A leading Irish convenience store chain now has 50 self-serve kiosks that feature Tim Hortons coffee and donuts following a successful test. Licensing income from this venture is small, but it gives Tim Hortons a platform that it can use for future overseas expansion. Meanwhile, Tim Hortons plans to expand in the United States, from 300 stores to 500. Sales at its U.S. stores tend to lag behind its Canadian outlets, due to strong competition from larger coffee and fast-food chains. But the company plans to target areas where it can steadily improve its market share, such as states on the Canadian border....
TELUS CORP. (Toronto symbols T $62 and T.A $61; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 334.4 million; Market cap: $20.6 billion; SI Rating: Above average) has gained roughly 15% in the past few weeks, as a possible takeover bid for rival BCE Inc. has spurred speculation that Telus could also become a takeover target. It’s also possible the two firms will merge, but that would face strong opposition from telecom regulators and consumer groups. Meanwhile, strong demand for new wireless services such as downloadable video, games and ringtones helped offset slower subscriber growth. That helped increase the company’s total revenue in the first quarter of 2007 to $2.21 billion, up 6.3% from $2.08 billion a year earlier. Earnings jumped 50.0%, to $0.90 a share from $0.60. The most recent figure excludes a one-time charge related to its employee stock option program. Telus’s ongoing investments in its wireless network, as well as new rules that let customers keep their current mobile number, should help it attract more subscribers....
Oil and gas producers must spend large amounts every year to replace diminishing reserves, which cuts their short-term profits. But if done right, these projects should last decades. In Canada, most big energy companies are expanding their operations in Alberta’s oil sands region. Although new environmental regulations could add to the already high costs of developing the oil sands, higher oil prices will probably offset these extra costs. Higher prices will also help offset the costs of other expensive projects, such as new pipelines and offshore platforms. These three top energy companies are all doing a good job holding down their operating and capital costs in a volatile sector. All three are also attractive in relation to earnings and cash flow....
TORONTO-DOMINION BANK $69 (Toronto symbol TD; Conservative Growth Portfolio, Finance sector; Shares outstanding: 719.0 million; Market cap: $49.6 billion; SI Rating: Above average) has competed its acquisition of the 41% of TD Banknorth Inc. that it did not already own for $3.2 billion U.S. That’s 17% more than the $3.1 billion (Canadian) or $4.29 a share that TD earned before one-time items in the fiscal year ended October 31, 2006. TD plans to restructure TD Banknorth’s operations, including closing 24 of its 600 branches in the northeast U.S. It also plans to bring in some of the techniques that have improved the performance of its Canadian operations, such as longer branch hours. Due to growing credit losses, restructuring costs and intense competition for new customers, TD Banknorth’s contribution to the parent’s second quarter earnings fell 61%, to $23 million from $59 million a year earlier. But lower costs will help this business earn around $108 million in the third quarter, and $123 million in the fourth quarter....
TORSTAR CORP. $22 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 78.5 million; Market cap: $1.7 billion; SI Rating: Above average) earned $0.20 a share (total $15.7 million) in the first quarter of 2007, nearly triple the $0.07 a share (total $5.9 million) it earned a year-earlier. However, the year-earlier earnings did include a $3.7 million (pre-tax) restructuring charge. Revenue rose 5.7%, to $377.4 million from $357.1 million. Most of the gains come from Torstar’s community newspaper division and Internet sites, which offset flat growth at its flagship newspaper, The Toronto Star. The company now plans to redesign The Toronto Star, including narrowing its size. That should save it $4 million a year. The stock moved up after Fairfax Financial Holdings Inc. acquired about 18% of Torstar’s non-voting ‘B’ shares. A takeover offer for Dow Jones, owner of The Wall Street Journal, has also helped draw attention to the value of strong newspaper brands....
ALCAN INC. $86 (Toronto symbol AL; Conservative Growth Portfolio, Resources sector; Shares outstanding: 367.6 million; Market cap: $31.6 billion; SI Rating: Above average) soared after rival aluminum producer Alcoa Inc. (New York symbol AA) launched a hostile (that is, unwanted by Alcan’s management) takeover bid for the company. Alcoa is offering $58.60 U.S. in cash plus 0.4108 of an Alcoa common share for every Alcan share. At Alcoa’s current price, the offer is worth roughly $82.30 (Canadian). The merger would create the world’s largest aluminum producer, with operations in 67 countries and annual revenue of $54 billion U.S. Of course, the bid faces significant regulatory hurdles. A takeover could jeopardize Alcan’s long-term deals for cheap electrical power in Quebec and B.C. The merged company would also have a dominant share of the aluminum aerospace market, so it would probably have to sell some of these operations....
The printing and newspaper publishing industry has fallen out of favour with investors in the past few years, as advertisers move to the Internet and away from traditional printed ads. But Transcontinental has cut its reliance on traditional printing/publishing with faster-growing operations, such as direct marketing. Recent investments in new plants and presses also cut its long-term operating costs. Much of Transcontinental’s growth in the past few years is due to acquisitions. In fact, goodwill is now a high 1.2 times equity. But the company has done a good job integrating these new assets, so the risk of a writedown is modest....
SAPUTO INC. $45 (Toronto symbol SAP) has paid $12 million for a UK-based maker of mozzarella cheeses. This is a tiny purchase compared to Saputo’s $4.6 billion market value. But acquisitions like this give Saputo a low-risk way to expand to new markets. Best Buy. FPI LTD. $15 (Toronto symbol FPL) has received permission from the Newfoundland government to try to sell some of its fish harvesting and processing assets. That helped prompt a 50% jump in FPI’s stock price in the past month. However, the stock could drop just as fast if a deal falls through, or political interference prevents FPI from extracting a higher price. Hold. PENGROWTH ENERGY TRUST $19 (Toronto symbol PGF.UN) has stayed in a narrow range for the past few months, mainly due to concerns over Ottawa’s intention to tax trust earnings in 2011. Fears that lower oil and gas prices would force Pengrowth to cut its $3.00 distribution rate (15.8% yield) have also weighed on the unit price. But we feel energy prices will remain steady in 2007. Even if Pengrowth cut the distribution 25%, it would still yield about 12%. Buy....