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
Both BCE and Telus have unveiled plans to convert into income trusts, which helped spark a rise in their stock prices. Canada’s other big telecom company, Manitoba Telecom, moved up on rumors that it too would convert. The trust structure will let BCE and Telus avoid a big tax increase in the next few years as certain tax shelters expire. But investors have higher payout expectations of a trust compared with a regular company. Telecom companies must invest large sums in new equipment, or risk losing customers. These costs could hurt BCE’s and Telus’s ability to raise future cash distributions....
BELL ALIANT REGIONAL COMMUNICATIONS INCOME FUND $34 (Toronto symbol BA.UN; Conservative Growth Portfolio, Utilities sector; SI Rating: Above average) provides telephone services to over 3.4 million customers in rural areas of Ontario and Quebec, and all of Atlantic Canada. This business accounts for roughly two-thirds of its revenue. It also provides computer services to businesses, and high-speed Internet access. Shareholders of Aliant Inc. received one trust unit for each common share held, and now own about 26.5% of the new trust. BCE shareholders received 0.0725 of a unit for each share held, and own roughly 28.5%. BCE owns the remaining 45%, and operates the new trust. Bell Aliant paid an initial cash distribution of $0.3996 a unit, to cover the last three weeks of July and all of August. It plans to pay a regular monthly distribution of $0.2283 a unit; the annual rate of $2.74 yields 8.1%....
MDS INC. $19 (Toronto symbol MDS; Conservative Growth Portfolio, Consumer sector; SI Rating: Average) is still having problems with its drug-testing lab in Montreal, which is currently under review by the U.S. Food and Drug Administration. The company estimates that this review cut its earnings by $10 million in its third fiscal quarter ended July 31, 2006. MDS earned $0.15 a share (total $23 million) from continuing operations in the quarter, up 50% from $0.10 a share ($14 million) a year earlier. But if you exclude one-time items, per-share earnings fell 23.5%, to $0.13 from $0.17. Revenue rose 2.4%, to $377 million from $368 million. As part of a major restructuring plan, MDS has just agreed to sell its laboratory services business. That will let it focus on its three core businesses: contract drug research, mass spectrometers and medical isotopes for cancer treatments....
LOBLAW COMPANIES LTD. $47 (Toronto symbol L; Conservative Growth Portfolio, Consumer sector; SI Rating: Above average) is Canada’s leading food retailer by market share, with over 1,000 company-owned and franchised stores across Canada. These include many supercentres, which carry a wider range of food and general merchandise, and are larger than Sobeys’ stores. The company has struggled in the past few months as it overhauls its distribution system. The new system should cut the company’s costs and help it compete with Wal-Mart, which is adding more grocery items to its stores. Loblaw is also converting more of its stores into supercentres. A special deal with its Ontario union in 2003 let Loblaw pay supercentre workers less than its regular store workers. The company has just signed a new union contract that should let it convert more stores into supercentres....
Natural gas prices soared to around $16 U.S. per million British thermal units in late 2005, as Hurricane Katrina hurt gas production in the Gulf Coast region of the United States. But supplies improved, and prices fell to their current level of around $6 U.S. The collapse of the Amaranth hedge fund, which made big bets that prices would rise, also helped keep prices down. Lower gas prices have had an effect on two of our favourites: AGRIUM INC. $30 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; SI Rating: Average) needs natural gas to make its fertilizers. Thanks partly to falling gas prices, the stock has gained 20% in 2006, and 70% since we made it our Stock of the Year in 2005....
The supermarket industry is becoming increasingly competitive. Drug stores and other non-food retailers are adding grocery products to improve customer traffic and spending per visit. In the past, supermarkets responded to increased competition by cutting prices. But profit margins are typically less than 2% of sales, leaving little room for price cuts. Supermarkets are now looking at better ways to expand sales and profits, such as improving the quality of their stores, expanding product selection and upgrading distribution systems....
NOVELIS INC. $24 (Toronto symbol NVL; Conservative Growth Portfolio, Manufacturing & Industry sector; SI Rating: Average) is the world’s largest maker of rolled aluminum products, including beverage cans, packaging and automotive parts. The company recently restated its earnings to correct accounting problems related to its spin-off from Alcan. It now earned $1.21 a share (total $90 million) in 2005, up 63.5% from $0.74 a share ($55 million) in 2004 (all amounts except share price in U.S. dollars). Sales rose 7.7%, to $8.4 billion from $7.8 billion. Novelis now buys aluminum to make its products. But 20% of its sales are under contracts that limit its ability to pass along rising aluminum costs to its customers. Novelis is phasing out this practice, a remnant from its days as part of Alcan, and aims to eliminate half of its price-capped contracts by the start of next year....
Here are three aggressive stocks that have struggled recently for various reasons such as management uncertainty, the strength of the Canadian dollar, too much debt and doubts about their technologies. We still like their long-term prospects, however, and we see them as buys for patient investors who can accept some risk. GENNUM CORP. $11.50 (Toronto symbol GND; Aggressive Growth Portfolio, Manufacturing & Industry sector; SI Rating: Above average) is the highest rated stock in the bunch. It makes chips that enhance the quality of video signals, mostly for major TV display makers and broadcasters. This business supplies two-thirds of its revenue. Gennum also makes audio chips for hearing aids and headsets. Demand for high-definition TV sets is growing fast, and Gennum has won several new video chip contracts in the past year. The company’s new audio headsets, which help filter excess sounds in noisy environments, also have great potential....
ENCANA CORP. $54 (Toronto symbol ECA; Conservative Growth Portfolio; Resources sector; SI Rating: Average) aims to expand production at its oil sands projects in Alberta 10-fold in the next decade. As part of this strategy, EnCana is now thinking about building its own upgrading facility in Western Canada that would refine the tar-like oil sands output into various petroleum products. That makes sense, since EnCana would earn higher profits processing oil than simply selling the unrefined product. EnCana would like to cut its risk by bringing in partners. However, falling oil prices and rising costs for labour and equipment could hurt the feasibility of this project, and make it difficult to attract new investors....
ARBOR MEMORIAL SERVICES INC. $24 (Toronto symbol ABO.A; Aggressive Growth Portfolio, Consumer sector; SI Rating: Average) owns 41 cemeteries, 27 crematoria, 3 reception centres and 94 funeral homes in eight Canadian provinces. About half of its operations are in Ontario. Arbor sells most of its cemetery plots and services through advance sales plans. Arbor must hold this cash in trust until it performs a service. In the meantime, it earns interest income from this cash. Investment income now accounts for 7% of revenue. In its second fiscal quarter ended April 30, 2006, Arbor earned $0.61 a share (total $6.4 million), up 13.0% from $0.54 a share ($5.7 million) a year earlier. Revenue rose 8.8%, to $55.9 million from $51.4 million. Most of the increase came from the recent acquisition of seven funeral homes in the Ottawa area for $24 million....