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
ALCAN INC. $60 (Toronto symbol AL; Conservative Growth Portfolio, Resources sector; Shares outstanding: 366.7 million; Market cap: $22.0 billion; SI Rating: Average) is the world’s third-largest producer of aluminum, after U.S.-based Alcoa Inc. and Rusal, a Russian company. It also makes aluminum products for the aerospace and automotive industries. In the three months ended December 31, 2006, Alcan earned $1.09 a share (total $406 million), roughly double its year-earlier profit of $0.54 a share ($205 million). Sales grew 24.0%, to $6.2 billion from $5.0 billion, thanks to a 30% jump in aluminum prices. Cash flow per share jumped to $2.22 from $1.09. (All amounts except share price in U.S. dollars.) Alcan now aims to increase its capacity by a third in the next few years. It’s building a $550 million facility in Quebec that will use a new process that cuts electricity needs....
BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $29 (Toronto symbol BA.UN; Conservative Growth Portfolio, Utilities sector; Units outstanding: 238.0 million; Market cap: $6.9 billion; SI Rating: Above average) earned $0.65 a unit in the fourth quarter of 2006, excluding unusual items stemming from the creation of Bell Aliant in July 2006. In the year-earlier quarter, Aliant Inc. earned $0.41 a share, which implies a 58.5% gain. On a pro-forma basis, which assumes the reorganization occurred at the start of 2005, revenue rose 2.0%, to $852.2 million from $835.8 million. Strong demand for wireless and high-speed Internet services offset lower local and long distance revenue. Thanks to the strong results, Bell Aliant has increased its monthly distribution 2.9%, from $0.2283 a unit to $0.235. The new annual rate of $2.82 yields 9.7%....
NOVELIS INC. $44 (Toronto symbol NVL; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 74.0 million; Market cap: $3.3 billion; SI Rating: Average) has struggled since former parent company Alcan Inc. (see page 25) spun it off in early 2005. Novelis uses aluminum to make beverage containers, automotive parts and construction materials, and many of its major supply contracts lock in aluminum prices at certain ranges. That prevented it from passing along rising input costs to its customers, and squeezed profit margins. The company is now phasing out these contracts. Accounting problems related to the spin-off also hurt its reputation with investors. We felt these were temporary setbacks, and continued to view Novelis as a buy. It seems others share our view. A media report that an Indian building materials company plans to launch a takeover bid helped spark a 25% jump in Novelis’s stock price....
Thanks to Free Trade Agreement with the United States, many U.S. retail chains have expanded their operations in Canada. That includes Wal-Mart, the world’s biggest retailer. Wal-Mart’s sophisticated inventory control systems and leverage with suppliers let it sell products for less than most of its competitors. Faced with this threat, many Canadian retailers have copied some of Wal-Mart’s tactics. This has helped them hang on to their market share, and the improved efficiencies have increased their profits. Here are three top Canadian retailers that have overhauled their businesses in the past few years. Sobeys and Canadian Tire are now enjoying the benefits of new equipment and better stores. Loblaw’s restructuring is taking longer than we anticipated, but its recent moves should also pay off....
We always try to strike a balance in the information we provide — not too little and not too much. One bit of information that doesn’t get the attention it deserves is a company’s market capitalization or “market cap”. This is the value of all common stock it has outstanding. When analyzing a stock, we of course always look at its market cap. Now we have decided to add this figure to the information we routinely provide to you at the beginning of each of our recommendations....
The food-processing industry seems dull to many investors, but sometimes it creates surprisingly large capital gains. That can happen when a company builds brand names that generate rising sales at premium prices. On the other hand, because consumers tend to stick with brands they know and trust, food processors offer a substantial margin of safety. Here are two leading food processing companies pursuing opposite strategies. Saputo is expanding through acquisitions, mainly of smaller competitors that it can quickly absorb. In contrast, Maple Leaf Foods is consolidating its operations to focus on its more profitable businesses. Still, both approaches should improve their long-term profitability. SAPUTO INC. $39 (Toronto symbol SAP; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 103.2 million; Market cap: $4.0 billion; SI Rating: Average) is Canada’s largest producer of dairy products. Major brands include Saputo, Armstrong, Stella and Dairyland. The company is also the fifth-largest cheese producer in the United States, and the third-largest dairy company in Argentina. Saputo’s Canadian businesses supply 80% of its profit....
FPI LTD. $7.85 (Toronto symbol FPL) earned $0.25 a share in the third quarter of 2006 compared with a loss of $0.35 a year earlier, thanks to cost controls and the extra earnings from recent acquisitions. However, sales fell 15.4%, to $174.5 million from $206.2 million, due to lower selling prices for fish products and the high Canadian dollar. Hold. FORDING CANADIAN COAL TRUST $24 (Toronto symbol FDG.UN) has reorganized itself from an income trust into a royalty trust. The change removed restrictions on foreign ownership, and should increase Fording’s liquidity (the units also trade in New York). The new structure will not affect Fording’s current $3.80 annual distribution rate, which yields 15.8%. Buy. GENNUM CORP. $14 (Toronto symbol GND) has gained over 40% in the past six months, mainly due to a new plan to improve customer service. The company also aims to expand its overseas sales. Gennum probably earned $0.55 a share in its fiscal year ended November 30, 2006. But profits could grow to $0.77 in fiscal 2007, and the stock trades at 18.2 times that figure. Buy....
IMPERIAL OIL LTD. $38 (Toronto symbol IMO; Conservative Growth Portfolio, Resources sector; SI Rating: Average) is Canada’s largest oil company, based on reserves and production. It also operates refineries, and 2,000 gas stations under the “Esso” banner. ExxonMobil Corp. owns roughly 70% of Imperial’s shares. This puts it in a strong position to weather the current downturn in oil prices. Imperial’s revenue fell from $17.3 billion in 2001 to $17.0 billion in 2002, but jumped to $28.2 billion in 2005 thanks to rising oil prices. Income slipped from $1.26 billion in 2001 to $1.22 billion in 2002. However, per-share earnings rose from $1.06 to $1.08 due to fewer shares outstanding. Earnings rose to $2.53 a share (total $2.6 billion) in 2005. Cash flow per share fell from $1.71 in 2001 to $0.41 in 2002, but grew to $3.07 in 2005.
Also gains from lower gas prices
Revenue in 2006 probably fell to around $26 billion, as energy prices moved down. However, the company needs natural gas to run its Alberta oil sands projects, so it benefits from lower gas prices. Consequently, Imperial’s earnings in 2006 should grow to around $2.90 a share ($2.8 billion). The stock trades at 13.1 times that estimate. The $0.32 dividend yields 0.8%....
MOLSON COORS CANADA INC. (Toronto symbols TPX.A $90 and TPX.B $90; Conservative Growth Portfolio, Consumer sector; SI Rating: Average) has gained 25% in the past three months, mostly due to the company’s progress in cutting its costs. The company’s sales probably rose during the year-end holiday season, which is historically a busy time for brewers. Warmerthan- usual winter weather in the eastern part of North America should also help spur beer sales. Molson Coors now aims to expand sales and market share with several new beers. For instance, it recently started selling a new beer in the UK that has about half the alcohol of regular beer. That should appeal to health-conscious baby boomers. The company also hopes to take advantage of growing interest in premium specialty beers. It recently launched Blue Moon, a Belgian-style beer with a citrus-like taste....
NOVELIS INC. $34 (Toronto symbol NVL; Conservative Growth Portfolio, Manufacturing & Industry sector; SI Rating: Average) is making progress phasing out price caps, which prevent it from passing along rising aluminum costs to its customers. But this will take several more years. The company feels it will be unable to pass along $230 million to $255 million in extra costs in 2007, and a total of $380 million to $430 million after 2007 (all amounts except share price in U.S. dollars). Novelis lost $1.38 a share (total $102 million) in the third quarter of 2006. Novelis has fixed its accounting errors, and the stock has moved up lately. It’s also doing a good job paying down debt....