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.
[text_ad]
Read More
Close
Dividend Stocks Library Archive
FORDING CANADIAN COAL TRUST $27 (Toronto symbol FDG.UN; Aggressive Growth Portfolio, Resources sector; Units outstanding: 147.0 million; Market cap: $4.0 billion; SI Rating: Average) now plans to let eligible unitholders (mainly Canadian and U.S. residents) re-invest their distributions in new units at a 5% discount. Canadian investors who do not wish to buy new units can opt to receive 102% of the regular distribution. This plan will improve Fording’s long-term investment appeal. It may also spur its unit price if enough investors (in RRSPs, say) decide to devote their distributions to buying more units. Meanwhile, Fording cut its first-quarter cash distribution by 31.6%, to $0.65 a unit from $0.95 in the fourth quarter of 2006. The new implied annual rate of $2.60 yields 9.6%. The cut is due to poor winter weather and mudslides, which hurt transport of coal to West Coast ports. This cut Fording’s coal shipments and raised transportation costs. These are temporary setbacks, and distributions will probably rise again as port traffic returns to normal....
The move to deregulate electricity markets in the past decade has spurred many utilities to sell their power on the open market, instead of at predetermined rates. While that helps their growth, it also increases volatility. Here are three utilities that prefer regulation, since it helps guarantee their profits. Operating in regulated markets also helps keep out competitors, and gives them plenty of cash for dividends. We see all three as buys, particularly for income-seeking investors....
As we said in our March 2 Successful Investor Hotline, North American stock markets could be sluggish or weak for a month or two. Since then, investor fears have shifted from China to so-called “sub-prime” lending to home buyers with less-than-sterling credit ratings. Investors fear that if tighter lending standards shut these buyers out of the market, it will have a negative effect on U.S. consumer spending. That’s a possibility — but it’s not a certainty, nor an overwhelming factor. We’d worry more if interest rates or unemployment were much higher than they are today, or if countries were raising barriers to world trade, or if any of several other risk factors were raising concerns....
Telus has been a top performer for us in the past few years. It got as low as $7.60 in 2002, mainly because investors feared it paid too much for its 2000 acquisition of wireless provider Clearnet. It then went on to a peak of $66 in September 2006. The final $12 of that rise happened after Telus announced that it planned to turn itself into an income trust. (Telus dropped its conversion plan after Ottawa decided to tax trust distributions.) But most of Telus’s gains since 2002 are due to the huge growth in its wireless business, which has helped offset slowing revenues at its traditional landline operations. Competition in the Canadian wireless industry will undoubtedly intensify in the next decade. But Telus’s ongoing investments in its wireless and traditional phone operations will give it a technological edge that will help fuel its long-term growth....
BCE INC. $30 (Toronto symbol BCE) has completed the sale of its Telesat satellite business for $3.25 billion, or 13.5% of its market cap of $24 billion. The company will use $1.2 billion of that to buy back 5% of its stock. It will probably use the rest to expand its high-speed Internet service, or make acquisitions. It may also increase its $1.46 dividend (4.9% yield). Best Buy. EMERA INC. $21 (Toronto symbol EMA) has acquired a 19% stake in the main electrical utility on the Caribbean island of St. Lucia for $22 million U.S. That’s roughly a third more than the $19.5 million or $0.18 a share it earned in the third quarter of 2006. This is the company’s first investment in this region, but it cuts its reliance on Atlantic Canada. Best Buy. TORSTAR CORP. $19 (Toronto symbol TS.B) recently launched Olive Canada Network, a new service that makes it easier for advertisers to place ads on Torstar’s own web sites, as well as a wide variety of other online sites. The company hopes this new operation will expand revenue from its Internet operations, which now supply roughly 2% of its total revenue. Best Buy.
TRANSALTA CORP. $25 (Toronto symbol TA; Conservative Growth Portfolio, Utilities sector; Shares outstanding: 202.4 million; Market cap: $5.1 billion; SI Rating: Average) operates 50 electrical power plants in North America and Australia. TransAlta’s revenue grew from $1.7 billion in 2002 to $2.8 billion in 2006, or 13.3% compounded annually. Most of that growth came from acquisitions. Earnings fell from $1.01 a share (total $171.2 million) in 2002 to $0.70 a share ($134.9 million) in 2004, due to rising fuel costs. In 2005, profits improved to $0.82 a share ($161.3 million). In November 2006, the company decided to close the coal mine next to its power plant in Centralia, Washington. It will continue to run the plant with coal from Wyoming under a long-term contract....
CANADIAN PACIFIC RAILWAY LTD. $64 (Toronto symbol CP; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 155.5 million; Market cap: $10.0 billion; SI Rating: Above average) is starting to enjoy the benefits of a recent expansion of its network in Western Canada. In the three months ended December 31, 2006, profits grew 7.5%, to $1.15 a share from $1.07 a year earlier. These figures exclude unusual items and foreign exchange losses. Revenue rose just 1.7%, to $1.19 billion from $1.17 billion, as lower coal shipments offset higher grain and fertilizer volumes. The company is also doing a good job of cutting its costs. Its operating ratio (regular operating expenses divided by revenue — the lower, the better) fell to 73.1% in the latest quarter from 73.9% a year earlier. A plan to increase locomotive speed and cut waiting times in rail yards should help improve CP’s efficiency in 2007. The recent weakening in the Canadian dollar should also help raise earnings at its U.S. operations. Canadian Pacific is a buy.
NOVA CHEMICALS CORP. $37 (Toronto symbol NCX; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 82.6 million; Market cap: $3.1 billion; SI Rating: Extra risk) lost $9.46 a share (total $781 million) in the fourth quarter of 2006, mostly due to a $772 million after-tax restructuring charge (all amounts except share price in U.S. dollars). It lost $0.80 a share ($66 million) in the year-earlier quarter. Revenue rose 14.3%, to $1.6 billion from $1.4 billion. Nova is making good progress with its restructuring plan. It has already cut $127 million out of its annual costs, and should save $140 million a year by 2008. Nova Chemicals is a buy....
We’ve mostly avoided resource income trusts, due to their generally low investment quality. But we made an exception for Pengrowth (Toronto symbol PGF.UN), which is the sole oil & gas trust we recommend in The Successful Investor. We made a second exception for Pengrowth by recommending it on two of our Portfolios: our Aggressive Growth Portfolio and our Portfolio for Income-seeking Investors. The trust’s high-quality oil and gas properties make it a reasonably safe investment, compared to our other Aggressive Portfolio recommendations. We think it stands to prosper if oil settles into a long-term $40 U.S. to $80 U.S. trading range as we expect....
Ottawa’s plan to tax trust distributions in 2011 led to big drops for most income trusts. But high-quality trusts like Pengrowth and Fording have rebounded nicely. We feel they will continue to pay aboveaverage yields, even after 2011. PENGROWTH ENERGY TRUST $20 (Toronto symbol PGF.UN; Aggressive Growth Portfolio, Resources sector; Units outstanding: 247.0 million; Market cap: $4.9 billion; SI Rating: Average) produces oil and natural gas from properties in Alberta and British Columbia. Oil accounts for 55% of its production, while gas supplies 45%. Pengrowth recently merged with Esprit Energy Trust in an all-stock transaction. It also acquired several properties in Western Canada from U.S.- based ConocoPhillips for $1.04 billion. Together, these purchases increased Pengrowth’s reserves by 60%, and its production by 70%....