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
BCE INC. $35 (Toronto symbol BCE; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 807.6 million; Market cap: $28.3 billion; SI Rating: Above average) has moved up to its highest level in five years on takeover rumors. Media reports suggest that the Ontario Teachers’ Pension Plan, which owns 5.3% of BCE, may team up with a U.S. firm to offer $40 a share. Acquiring control of BCE could be difficult. Institutions control roughly 22% of BCE’s stock, and could block an offer they feel is too low. Federal regulations limit foreign ownership of Canadian telecom companies to 46%, which makes it harder to recruit non-Canadian investors. Other potential Canadian bidders like Telus would probably face competition concerns, particularly in the highgrowth wireless field....
Finning supplies equipment and services to the mining and oil exploration industries. Thanks to the huge rise in cyclical resource prices, Finning’s stock has doubled in the past five years. The stock could suffer if resource prices fall. But we feel this boom has several years of life ahead, due to spreading industrialization in Asia. The company should also continue to gain from its exposure to the construction industry, particularly as governments increase spending on infrastructure. Despite Finning’s big rise, we feel it still has great long-term appeal. The stock is still attractive in relation to earnings, cash flow and sales. FINNING INTERNATIONAL INC. $54 (Toronto symbol FTT; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 89.5 million; Market cap: $4.8 billion; SI Rating: Above average) is one of the world’s largest dealers of heavy equipment made by Caterpillar Inc., such as tractors, bulldozers, pavers and trucks. Major customers include the mining, forest products and construction industries....
ROYAL BANK OF CANADA $57 (Toronto symbol RY) earned $1.14 a share in its first fiscal quarter ended January 31, 2007, up 28.1% from $0.89 a year earlier, thanks to strong gains at both its Canadian and U.S. operations. The bank also raised its quarterly dividend 15%, from $0.40 a share to $0.46. It now yields 3.2%. The current rate is 35% of earnings, which is below Royal’s target of between 40% and 50%, so further hikes seem likely. Buy. CANADIAN PACIFIC RAILWAY LTD. $63 (Toronto symbol CP) has increased its quarterly dividend four times in the past three years. The new annual rate of $0.90 yields 1.4%. The company also increased its latest share repurchase authorization by 10% over 2006. Best Buy. CAE INC. $12 (Toronto symbol CAE) has sold 33 flight simulators to civilian airlines so far in fiscal 2007 (fiscal years end March 31). That’s a 57% gain over the 21 simulators it sold in fiscal 2006. The company’s pilot training business is also in a good position to profit from rising demand for new pilots, particularly in Asia. Buy....
THE THOMSON CORP. $48 (Toronto symbol TOC; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 640.6 million; Market cap: $30.7 billion; SI Rating: Above average) provides specialized information products and services to over 20 million professionals in the legal, scientific, medical and financial industries. In the past few years, Thomson has sold most of its print operations to focus on electronic data products. That cut its paper and delivery costs, and increased its profits. Thomson now gets over 80% of its revenue from electronic products.
Final step in decade-long shift
Revenue fell from $7.8 billion in 2002 to $7.6 billion in 2003, but rose to $8.7 billion in 2005 (all amounts except share price in U.S. dollars). In October 2006, Thomson unveiled a plan to sell its Learning division, which mainly supplies textbooks to schools. If you disregard this operation, Thomson’s revenue fell to $6.6 billion in 2006....
TORSTAR CORP. $19 (Toronto symbol TS.B; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 78.5 million; Market cap: $1.5 billion; SI Rating: Above average) is thinking about selling or closing its Transit Television Network division, which operates digital information screens on buses and subway trains. Despite contracts with big transit systems in Los Angeles and Atlanta, losses continue to grow. Unloading this business would free up cash for operations with greater potential, such as Torstar’s Internet sites. Torstar earned $0.51 a share in the fourth quarter of 2006, up 6.3% from $0.48 a year earlier. These figures exclude the negative impact of foreign exchange rates at Torstar’s Harlequin Enterprises book publishing division. On a reported basis, profit fell 4.2%, to $0.46 a share. Revenue fell 0.6%, to $414.6 million from $417.2 million, as strong growth at the community newspapers offset lower ad sales at the flagship Toronto Star. The stock has stayed in narrow range for the past few months, and now trades at 17.9 times the $1.06 a share it will probably earn in 2007. But the stock could soar if Torstar decides to spin off or sell Harlequin. The $0.74 dividend (3.9% yield) is probably safe for now....
IMPERIAL OIL LTD. $41 (Toronto symbol IMO; Conservative Growth Portfolio, Resources sector; Shares outstanding: 953.0 million; Market cap: $39.1 billion; SI Rating: Average) had to cut production by 50% at its Nanticoke refinery in Ontario due to a fire. This plant accounts for about 25% of Imperial’s refining capacity, and the slowdown led to shortages at many of its Ontario gas stations. It will probably take a few more weeks for the plant to return to full capacity, but it’s unlikely the fire will have a material impact on Imperial’s 2007 profits. Imperial Oil is a buy. DUNDEE CORP. $52 (Toronto symbol DC.A; Aggressive Growth Portfolio, Finance sector; Shares outstanding: 25.1 million; Market cap: $1.3 billion; SI Rating: Average) has increased its stake in Breakwater Resources Ltd., from 18.4% to 21.55%. (Breakwater operates zinc mines in British Columbia, Honduras and Chile.) The extra shares cost Dundee $3.1 million, which is slightly less than the $0.13 a share (total $3.5 million) it earned in the third quarter of 2006....
LEGACY HOTELS REAL ESTATE INVESTMENT TRUST $13 (Toronto symbol LGY.UN; Aggressive Growth Portfolio, Manufacturing & Industry sector; Units outstanding: 105.3 million; Market cap: $1.5 billion; SI Rating: Extra risk) has formed a special committee to evaluate ways to enhance investor value, including a possible sale. Fairmont Raffles Holdings International, which owns about 23% of Legacy and manages its hotels, would probably support a takeover. The news caused the units to jump 25%. While Legacy’s high quality properties should attract several bids, a deal is far from certain. We now see Legacy as a hold.
BOMBARDIER INC. (Toronto symbols BBD.A $4.55 and BBD.B $4.56; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 1.7 billion; Market cap: $7.7 billion; SI Rating: Extra risk) is the world’s third-largest maker of commercial aircraft, after Boeing and Airbus. The company is also a leading maker of passenger railway cars. Due to steadily rising demand, the company now plans to build a new 100-seat regional jet, which is slightly larger than its current 70-seat and 90-seat models. It now has 38 firm orders for the plane, and 23 conditional ones. The new plane will cost $300 million to develop; Bombardier earned $0.03 a share (total $53 million) in the three months ended October 31, 2006 (all amounts except share price in U.S. dollars). Each plane sells for roughly $45 million, and the company feels it can sell 400 of them over the next 20 years....
CANADA BREAD COMPANY, LTD. $53 (Toronto symbol CBY; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 25.4 million; Market cap: $1.3 billion; SI Rating: Above average) makes fresh and frozen breads and baked goods under several brands, including Dempster’s, Healthy Way, Olafson’s, and Tenderflake. The company also makes pastas and sauces under the Olivieri name. Customers include retail food stores, in-store bakeries and restaurants, in Canada, the United States and the UK. In the three months ended December 31, 2006, the company earned $0.70 a share (total $17.7 million), down 5.4% from $0.74 a share ($18.7 million) a year earlier. The latest quarterly earnings exclude $3.7 million (after-tax) expenses related to the closure of a bakery in B.C. and other restructuring items. Sales rose 15.1%, to $355.5 million from $308.8 million, mainly due to higher prices. A big part of Canada Bread’s success in the past few years is acquisitions. In fact, if you disregard acquisitions, sales in the latest quarter grew just 8%....
SHAWCOR LTD. $27 (Toronto symbol SCL.A; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 74.0 million; Market cap: $2.0 billion; SI Rating: Average) is profiting from recent acquisitions, as well as its plan to improve efficiency at its pipeline coating plants. In 2006, income from continuing operations rose 13.6%, to $1.25 a share from $1.10 a year earlier. Revenue grew 5.0%, to $1.06 billion from $1.01 billion. Energy prices will probably remain high in 2007, which should continue to spur demand for ShawCor’s products and services....