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
TELUS CORP. (Toronto symbols T $46 and T.A $45 (old symbol T.NV); Conservative Growth Portfolio, Utilities sector; SI Rating: Above average) continues to offer new wireless services, which should help it attract new customers and squeeze more revenue out of current users. Telus now plans to offer satellite radio services from XM Canada to its wireless customers. Only 10% of cellphone users subscribe to an entertainment service, so there’s plenty of room for growth. The company should also benefit from a new federal telecommunications policy. That will give Telus and other traditional phone service providers greater flexibility to compete with cable and Internet-based phone services....
PENGROWTH ENERGY TRUST (Toronto symbols PGF.A $27 and PGF.B $26; Aggressive Growth Portfolio, Resources sector; SI Rating: Average) is getting rid of its dual-class system of “A” and “B” units. It put the two classes in place to comply with Canada’s foreign-ownership requirements and maintain its tax treatment as a Canadian mutual fund trust. However, new rules let Pengrowth keep its Canadian trust status, regardless of its foreign ownership. Effective July 27, 2006, Pengrowth will convert the “A” and “B” units into a single class on a 1-for-1 basis. Prices of the “A” and “B” units have been converging as that date nears, as we predicted. Pengrowth is a buy....
FORDING CANADIAN COAL TRUST $34 (Toronto symbol FDG.UN; Aggressive Growth Portfolio, Resources sector; SI Rating: Average) is different from other income trusts. For one thing, it came into existence through the breakup of Canadian Pacific Railway, rather than as a new issue created to sell to investors. In addition, the company has vast reserves of coal. Mining could continue at current rates for 25 years; with further development, its reserves could last 100 years. Of course, the company’s cash distributions are bound to rise and fall with coal prices and with the volume of coal sold. But the current quarterly distribution of $1.00 a unit yields 11.8%. Most income and royalty trusts qualify as ‘Extra risk’ or ‘Speculative’ in our SI rating system, which requires us to make judgment calls on a number of key factors. We awarded Fording a rating of Extra risk when it began trading after the 2001 Canadian Pacific breakup, because we wanted to see how it did as an independent enterprise. Based on its performance, we have raised Fording’s rating, from ‘Extra risk’ to ‘Average’....
ANDRES WINES LTD. $27 (Toronto symbol ADW.A (old symbol ADW.NV.A); Income Portfolio, Consumer sector; SI Rating: Above average) is Canada’s second-largest producer of wine, after Vincor International (which is now a subsidiary of U.S.-based Constellation Brands, Inc.). Andres sells its products through provincial government liquor stores, and through its own chain of 102 retail outlets in Ontario. The company’s sales grew from $139.0 million in 2002 (fiscal years end March 31) to $211.8 million in 2006. Earnings rose from $1.15 a share (total $5.3 million) in 2002 to $2.01 a share ($9.6 million) in 2004. Restructuring costs cut Andres’ income to $1.77 a share ($8.5 million) in 2005, and to $1.25 a share ($6.05 million) in 2006. Disregarding unusual items, Andres earned $1.50 a share in fiscal 2006....
VERSACOLD INCOME FUND $9.10 (Toronto symbol ICE.UN; Aggressive Growth Portfolio, Consumer sector; SI Rating: Extra risk) is one of the world’s leading operators of public refrigerated warehouses. Farmers and food processing companies use these facilities to store perishable foods. In December 2005, Versacold paid $396.7 million for the refrigerated warehouse operations of Peninsular & Oriental Steam Navigation Co. That tripled Versacold’s size; it now has 74 warehouses in Canada, the U.S., Australia, New Zealand and Argentina. Due to the takeover, Versacold’s revenue in the first quarter of 2006 soared to $170.1 million from $44.3 million a year earlier. Income more than doubled, to $5.6 million from $2.7 million....
GREAT-WEST LIFECO INC. $30 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) has paid an undisclosed sum for roughly 2,600 small and mid-sized U.S. pension plans. The deal expands the company’s U.S. pension plan asset base by 9%, and should increase its earnings in 2007. The purchase should also make it easier for Great-West to offer these new clients other services, such as employee healthcare plans. The company gets over half of its income from businesses outside of Canada, and the high Canadian dollar has hurt Great-West’s overall profit growth. But the rising dollar also cuts the cost of foreign acquisitions. The stock now trades at 14.0 times the $2.15 a share Great-West will probably earn in 2006. Great-West Lifeco is a buy.
ENCANA CORP. $59 (Toronto symbol ECA; Conservative Growth Portfolio, Resources sector; SI Rating: Average) suspended work in 2003 on its Deep Panuke offshore natural gas field near Sable Island. The company feared that rising development and other costs would hurt the project’s feasibility. EnCana now hopes to restart work on Deep Panuke in the next year or two. Based on new drilling data, the company has scaled down its original plan, from three offshore platforms to one. A new royalty deal with the Nova Scotia government has also improved the project’s prospects. Gas prices have more than doubled since the discovery of Deep Panuke seven years ago. However, they have come down in the past few months as mild winter weather cut demand. Gas prices could come under more pressure over the next few years as imports of liquefied natural gas rise....
Many investors see the food industry as stable and slow-moving. However, food is in the news every day. Consumers worry about the risk of common foods from transfats and other ingredients. New scientific studies link health with the presence of vitamins, minerals and other food components. Obesity is a growing concern as it becomes more common and its risk becomes better understood. This volatile situation creates opportunities for well-managed food producers like these three. All are improving their market share with new products, and cutting costs. They are also enhancing their longterm potential with new projects outside of Canada. CANADA BREAD COMPANY, LTD. $61 (Toronto symbol CBY; Conservative Growth Portfolio, Consumer sector; SI Rating: Above average) is a leading supplier of fresh and frozen baked goods to supermarkets and restaurants. It also makes pastas and sauces. Its main brands include “Dempster’s”, “Tenderflake” and “Olivieri”....
Some investors wonder if we’re in a bear market — a downturn that lasts one to three years and knocks 20% or more off the market indexes. The last one began in mid-2000 and ended in the winter of 2002/2003. It was an extremely costly experience for investors who made the mistake of loading up on Internet and tech stocks. On the other hand, you came through fine if you followed our three-pronged approach: 1. focusing on well-established companies, which are far more likely than juniors to harbour hidden asset value;...
When we last featured CAE on our front page in November, 2004, we said the stock could soar as airlines revived following 9/11. CAE went on to rise as much as 80%, even though it faced a couple of major negatives. First, the rise in oil prices strained the budgets of the world’s airlines, who buy the company’s flight simulators. Second, the rise in the Canadian dollar undermined the value of the company’s sales in foreign markets (and foreign customers provide 91% of CAE’s revenues). The stock could remain sluggish, along with the rest of the market, in the next few months. But over the next couple of years and beyond, after the impact of oil prices and the Canadian dollar has run its course, we expect further big gains from CAE....