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
NOVELIS INC. $23 had to restate some of its previously reported earnings due to accounting errors. After a review, it now earned $0.14 a share in the three months ended September 30, 2005, down 70.2% from $0.47 a year earlier, due to higher interest costs and foreign exchange losses (all amounts except share price in U.S. dollars). Revenue crept up to $2.05 billion from $2.0 billion. The company is also aggressively paying down debt, and aims to phase out the remaining aluminum price caps on its supply contracts by the end of 2006. Buy. ALIANT INC. $36 will convert its common shares into units of the new Bell Aliant Regional Communications Income Fund, probably in the third quarter of 2006, after 99% of its shareholders voted for the plan. The new trust’s annual distribution rate of $2.74 implies a yield of 7.4%. Buy. FORTIS INC. $23 owns 68.5% of Belize Electricity Limited, which plans to raise cash for new power projects and upgrades through a rights offering. Fortis intends to exercise its rights, and buy enough stock to maintain its current ownership level. Economic expansion in Belize should spur long-term demand for electricity. Buy.
DUNDEE CORP. $38 (Toronto symbol DBC.A (old symbol DBC.SV.A); Aggressive Growth Portfolio, Finance sector; SI Rating: Average) provides investment management and brokerage services, mainly through 62%-owned Dundee Wealth Management Inc. It also owns the Dynamic family of mutual funds. These operations supply over 80% of Dundee’s revenue and profit. The company also develops real estate projects, mainly in Western Canada, and invests in junior resource companies, including a 51.3% stake in Eurogas Corp. (oil and gas exploration) and 18.6% of Breakwater Resources Ltd. (zinc and copper).
Revenues tripled in five years
Revenues jumped from $248.7 million in 2001 to $933.7 million in 2005, mainly due to acquisitions that expanded its wealth management operations. It lost $2.17 a share (total $57.0 million) in 2001, due to writedowns of its investment portfolio....
TECK COMINCO LTD. $65 (Toronto symbol TEK.B (old symbol TEK.SV.B); Conservative Growth Portfolio, Resources sector; SI Rating: Average) has dropped around 15% since it launched a $17.8 billion cash-and-stock hostile takeover bid for Inco Ltd. If successful, the purchase could increase the number of Teck class ‘B’ subordinate voting shares outstanding by 72%. Current investors fear that would dilute earnings and hurt the value of their holdings. Inco has recommended that its shareholders reject Teck’s offer. It’s also trying to fend off Teck by possibly merging with another mining company. That could force Teck to raise its offer. Teck Cominco is a hold.
PETRO-CANADA $48 (Toronto symbol PCA; Conservative Growth Portfolio, Resources sector; SI Rating: Average) is having trouble nailing down overseas gas supplies for its proposed liquefied natural gas (LNG) terminal in Quebec. That’s what probably prompted the company to offer $113 million U.S. for publicly traded junior oil producer Canada Southern Petroleum Ltd. The price is equal to just 25% of Petro-Canada’s first quarter profits before unusual items. Canada Southern’s undeveloped gas reserves in the Canadian Arctic could help make the LNG plant more economically feasible. Canada Southern has rejected the bid, but Petro-Canada can easily afford to improve on its offer....
THOMSON CORP. $46 (Toronto symbol TOC; Conservative Growth Portfolio, Consumer sector; SI Rating: Above average) continues to expand its electronic information operations. It just paid an undisclosed price for MercuryMD, a private company that provides patient data to physicians’ handheld computers. Thanks to growing demand for its electronic information services, Thomson’s income before unusual items in the three months ended March 31, 2006 rose 62.5%, to $0.13 a share (total $84 million) from $0.08 a share ($55 million) a year earlier (all amounts except share price in U.S. dollars). Revenue rose 5.6%, to $1.9 billion from $1.8 billion. Thomson plans to spend between $200 million and $500 million on acquisitions in 2006. Growing through acquisitions is risky, but Thomson tends to target small, profitable firms that enhance its current products and services. Still, the stock is expensive at 28 times earnings....
TIM HORTONS INC. $29 (Toronto symbol THI; Aggressive Growth Portfolio, Consumer sector; SI rating: Extra risk) has 2,900 coffee and donut stores in Canada and the United States. Franchisees own 97% of these outlets. On March 24, 2006, Tim Hortons sold stock to the public at $27.00 each in an initial offering. That cut parent Wendy’s International Inc.'s interest, from 100% to 82.75%. Wendy’s plans to hand out its remaining Tim Hortons shares to its own shareholders by the end of this year. In the three months ended April 2, 2006, Tim Hortons earned $0.39 a share (total $63.6 million), up 30.0% from $0.30 a share ($47.5 million) a year earlier. Most of that gain came from non-recurring tax rulings that cut its tax bill by $10.1 million. Revenue rose 15.2%, to $372.8 million from $323.6 million, thanks to successful new menu items and 27 new stores. Same-store sales rose 8.7% in Canada, and 9.8% in the U.S....
THE WESTAIM CORP. $5.40 (Toronto symbol WED; Aggressive Growth Portfolio, Manufacturing & Industry sector; SI Rating: Speculative) is developing emerging technologies through two subsidiaries, Nucryst Pharmaceuticals Corp. (Toronto symbol NCS) and iFire Technology Corp. Nucryst recently sold shares to the public, and Westaim hopes to take iFire public as well. Nucryst makes medical products that prevent infections in burns and wounds. It has a licensing agreement with UK-based medical device maker Smith & Nephew plc, which helps offset its development costs. Nucryst’s recent public offering cut Westaim’s interest, from 100% to 75.1%. iFire is currently perfecting a new way to make large-size, flat-screen TV sets. Unlike traditional flat-panel displays, which use gasses, liquids or vacuums, iFire’s process applies layers of chemicals onto glass panels. That speeds up the manufacturing process, and cuts costs....
MAVERICK TUBE CORP. $46 (New York symbol MVK; Aggressive Growth Portfolio, Manufacturing & Industry sector; SI Rating: Extra risk) makes steel tubes that energy exploration companies use to drill wells and transport oil. In 2000, U.S.-based Maverick Tube acquired one of our long-time Canadian recommendations, Prudential Steel Ltd., for stock. We advised Prudential investors to accept the offer at that time. Since then we have recommended buying Maverick, because we felt it stood to benefit from an upcoming oil and resources boom. Maverick’s earnings have jumped up and the stock has risen from around $10 a few years ago. The company should earn $6.67 U.S. a share in 2006, and the stock trades at just 6.9 times that figure. But these earnings are highly cyclical. As a major user of steel, Maverick is vulnerable to rising steel prices....
IMPERIAL OIL LTD. $39 (Toronto symbol IMO; Conservative Growth Portfolio, Resources sector; SI Rating: Average) gets about 80% of its oil production from its oil sands projects, mostly its 100%-owned Cold Lake facility. Imperial also owns 25% of the Syncrude Canada Ltd. oil sands project, which recently had to cut production due to problems with some new equipment. The company is currently working on its new Kearl Lake oil sands project, which could begin production in 2010. While oil sands developments have great long-term potential, they often cost much more than originally planned. That adds to Imperial’s risk, particularly if oil prices move down....
ALCAN INC. $53 (Toronto symbol AL; Conservative Growth Portfolio, Resources sector; SI Rating: Average) is the world’s second-largest producer of aluminum, after U.S.-based Alcoa Inc. High oil prices will put more pressure on automobile manufacturers to offer more fuel-efficient vehicles. One of the easiest ways for carmakers to cut fuel consumption is to replace more steel parts with aluminum products. Aerospace companies are also using more aluminum to cut the weight of new planes....