sapphire on January 7th, 2015

Cash goes in, cash comes out, right? Businesses that generate free cash flow, or those that eventually will, are what every investor should seek.
The problem is that not all shareholders need the cash coming out, usually as dividends. That is where dividend reinvestment plans (DRPs) come in.
The idea is that, instead of a dividend – cash coming out – the company issues you additional shares to an equivalent value. The question is whether they are worth it.

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sapphire on May 7th, 2014

CALGARY, ALBERTA–(Marketwired – May 2, 2014) – TransCanada Corporation (TSX:TRP) (NYSE:TRP) (TransCanada or the Company) today announced that the Board of Directors (Board) of TransCanada declared a quarterly dividend of $0.48 per common share for the quarter ending June 30, 2014, on the Company’s outstanding common shares. The common share dividend is payable on July 31, 2014, to shareholders of record at the close of business on June 30, 2014.

The Board also declared the following regular dividends on TransCanada’s preferred shares:

— A quarterly dividend of $0.2875 per share for the period up to but
excluding June 30, 2014, on TransCanada’s outstanding Cumulative
Redeemable First Preferred Shares, Series 1. The dividend is payable on
June 30, 2014, to shareholders of record at the close of business on June
2, 2014.

— A quarterly dividend of $0.25 per share for the period up to but
excluding June 30, 2014, on TransCanada’s outstanding Cumulative
Redeemable First Preferred Shares, Series 3. The dividend is payable on
June 30, 2014, to shareholders of record at the close of business on June
2, 2014.

— A quarterly dividend of $0.275 per share for the period up to but
excluding July 30, 2014, on TransCanada’s outstanding Cumulative
Redeemable First Preferred Shares, Series 5. The dividend is payable on
July 30, 2014, to shareholders of record at the close of business on June
30, 2014.

— A quarterly dividend of $0.25 per share for the period up to but
excluding July 30, 2014, on TransCanada’s outstanding Cumulative
Redeemable First Preferred Shares, Series 7. The dividend is payable on
July 30, 2014, to shareholders of record at the close of business on June
30, 2014.

— A quarterly dividend of $0.265625 per share for the period up to but
excluding July 30, 2014, on TransCanada’s outstanding Cumulative
Redeemable First Preferred Shares, Series 9. The dividend is payable on
July 30, 2014, to shareholders of record at the close of business on June
30, 2014.
These dividends are designated by TransCanada to be eligible dividends for purposes of the Income Tax Act (Canada) and any similar provincial or territorial legislation. An enhanced dividend tax credit applies to eligible dividends paid to Canadian residents.

Common shares purchased with reinvested cash dividends under TransCanada’s Dividend Reinvestment and Share Purchase Plan (DRP) will be acquired on the Toronto Stock Exchange at 100 per cent of the weighted average purchase price. The DRP is available for dividends payable on TransCanada’s common and preferred shares.

With more than 60 years’ experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas and oil pipelines, power generation and gas storage facilities. TransCanada operates a network of natural gas pipelines that extends more than 68,500 kilometres (42,500 miles), tapping into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services with more than 400 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns or has interests in over 11,800 megawatts of power generation in Canada and the United States. TransCanada is developing one of North America’s largest oil delivery systems. TransCanada’s common shares trade on the Toronto and New York stock exchanges under the symbol TRP. For more information visit: or check us out on Twitter @TransCanada or

FORWARD LOOKING INFORMATION This publication contains certain information that is forward-looking and is subject to important risks and uncertainties (such statements are usually accompanied by words such as “anticipate”, “expect”, “would”, “will” or other similar words). Forward-looking statements in this document are intended to provide TransCanada security holders and potential investors with information regarding TransCanada and its subsidiaries, including management’s assessment of TransCanada’s and its subsidiaries’ future financial and operation plans and outlook. All forward-looking statements reflect TransCanada’s beliefs and assumptions based on information available at the time the statements were made. Readers are cautioned not to place undue reliance on this forward-looking information. TransCanada undertakes no obligation to update or revise any forward-looking information except as required by law. For additional information on the assumptions made, and the risks and uncertainties which could cause actual results to differ from the anticipated results, refer to TransCanada’s Quarterly Report to Shareholders dated May 2, 2014, and 2013 Annual Report available on TransCanada’s website at and filed under TransCanada’s profile on SEDAR at and with the U.S. Securities and Exchange Commission at

Media Enquiries:

Shawn Howard/Grady Semmens/Davis Sheremata



Investor & Analyst Enquiries:

David Moneta/Lee Evans



sapphire on May 7th, 2014

TORONTO, May 1, 2014 /PRNewswire/ – Manulife Financial Corporation’s Board of Directors today announced a quarterly shareholders’ dividend of $0.13 per share on the common shares of Manulife Financial Corporation (the “Company”), payable on and after June 19, 2014 to shareholders of record at the close of business on May 13, 2014.

The Board also declared dividends on the following non-cumulative preferred shares, payable on or after June 19, 2014 to shareholders of record at the close of business on May 13, 2014.

• Class A Shares Series 1 – $0.25625 per share
• Class A Shares Series 2 – $0.29063 per share
• Class A Shares Series 3 – $0.28125 per share
• Class A Shares Series 4 – $0.4125 per share
• Class 1 Shares Series 1 – $0.35 per share
• Class 1 Shares Series 3 – $0.2625 per share
• Class 1 Shares Series 5 – $0.275 per share
• Class 1 Shares Series 7 – $0.2875 per share
• Class 1 Shares Series 9 – $0.275 per share
• Class 1 Shares Series 11 – $0.25 per share
• Class 1 Shares Series 13 – $0.2375 per share
• Class 1 Shares Series 15 – $0.304521 per share

In respect of the Company’s June 19, 2014 common share dividend payment date, the Board has decided that the Company will issue common shares in connection with the reinvestment of dividends and optional cash purchases pursuant to the Company’s Canadian Dividend Reinvestment and Share Purchase Plan and its U.S. Dividend Reinvestment and Share Purchase Plan. The price of common shares purchased with reinvested dividends will be reduced by a two (2%) per cent discount from the market price, as determined pursuant to the applicable plan.

About Manulife Financial
Manulife Financial is a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Clients look to Manulife for strong, reliable, trustworthy and forward-thinking solutions for their most significant financial decisions. Our international network of employees, agents and distribution partners offers financial protection and wealth management products and services to millions of clients. We also provide asset management services to institutional customers. Funds under management by Manulife Financial and its subsidiaries were approximately C$635 billion (US$574 billion) as at March 31, 2014. The Company operates as Manulife Financial in Canada and Asia and primarily as John Hancock in the United States.

Manulife Financial Corporation trades as ‘MFC’ on the TSX, NYSE and PSE, and under ’945′ on the SEHK. Manulife Financial can be found on the Internet at

SOURCE Manulife Financial Corporation

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sapphire on May 7th, 2014

The way the banks keep on pumping out more dividends seems too good to be true.
It is, but not because they can’t afford it. They will be on a free ride until interest rates return to normal, which is a long while off.
Even then, it will be their share prices, not dividends, that are threatened.
Chasing bank dividends has been a strategy that has paid in spades. Banks’ share prices have rocketed, while at the same time (or, more accurately, the result of) being almost dividend-dispensing ATMs.
Because this success has made them pricey, banking analysts are more than usually wary, not that most ever called the banks a screaming buy. After all, their record profits are not coming from generating more business, which has been barely growing at all.
But analysts looking at balance sheets did not see the stampede of grey army dividend chasers outside.
The banks did. ANZ is the latest to hike its dividend and bound to follow suit will be Westpac on Monday and NAB on Thursday.
Like the budget deficit, the banks’ profits depend on where you start. They had to set aside a lot for doubtful debts during the global financial crisis, but this provisioning thankfully proved too pessimistic. They also issued more shares to raise extra capital which, again, was not needed and they have been feeding back to shareholders ever since. Mind you, Qantas and Toyota have nothing on the way banks have been slashing staff too.
As the accounting entry of potential bad debts is unwound, banks’ profits rise without them having to do anything, for as long as interest rates stay low, so will bad debts, although rates can’t fall much further.
The banks are lending more as housing picks up, although analysts fret it will mean bad-debt provisions will rise again. That is true, but more lending also means more profits, especially when banks’ funding costs are falling, which they are exploiting by discounting mortgages.
So what happens when rates eventually rise? Don’t worry, they are on to that. Banks are preserving capital by finessing their popular dividend re-investment schemes, which give the one in four shareholders who take them up extra shares instead of cash.
Earlier this year, the Commonwealth Bank decided not to buy its own shares in the market and distribute them, but to issue new ones. ANZ has followed suit, as no doubt the others will.
That makes the dividend partly self-funding. In fact, $1 of every $4 paid out never leaves the bank.
While every superannuation fund and its dog sees dividends, which with franking credits yield more than 7 per cent, the cost is strung out and so is not obvious.
In the next correction, those who took the scrip may panic and dump their stock, exacerbating the drop. Then rising dividends won’t have seemed such a generous gift.
twitter @moneypotts

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Inflation is often one of investors’ greatest frustrations. It’s hardly as devastating as a deep bear market, but inflation is always there in the background, year after year, sapping gains and reducing values behind the scenes. Millions of investors try to avoid this erosion of capital by holding bonds, which guarantee a steady stream of income that can offset the declining real value of the bond itself. But for inflation-beating gains, it’s hard to beat the stocks of strong companies, which have consistently outperformed fixed-income investments for many decades.

A major source of that outperformance is the dividends most large public companies pay to their shareholders. Over the past century, the aggregate dividend yield of companies in the S&P 500 (SNPINDEX: ^GSPC ) has very rarely slipped below 2%, and in recent years that yield has actually moved into line with the yields on U.S. Treasuries. In fact, until the 1950s, the S&P composite — a data set compiled by Nobel Prize-winning Yale economist Robert Shiller that dates back to 1871 — regularly boasted higher yields than 10-year and longer-term Treasuries, and higher yields than investment-grade corporate bonds as well. The steep decline in the S&P’s aggregate yield since the 1980s also coincided with one of the strongest periods of share-price growth in American market history:

The S&P handily trounced bond returns since the 1980s, even before dividend reinvestment is taken into account, thanks to its huge share-price gains. Bond analyst Thomas Kenny recently found that the Barclays Aggregate Bond Index outperformed the S&P in only 10 out of the 34 full years of trading from 1980 onward, but its average gain of 8.4% produced far lesser gains than the S&P’s annual 13.9% growth rate. Over those 34 years, that’s the difference between growing a $100 investment to $1,470 and growing $100 to $4,400.

Over the long run, reinvesting the dividends earned from holding a representative slice of the S&P composite has made a huge difference in several ways. The investor who plowed his dividends back into new shares starting in 1913 would have shaved nearly a decade off of the 25-year bear market that followed the peak of 1929:

Small investors can use dividend-reinvestment plans (DRIPs) to assemble a portfolio of high-quality, dividend-paying stocks while paying virtually no fees.

There are more than 1,300 companies that have DRIPs, says Vita Nelson, publisher of Moneypaper’s Guide to Direct Investment Plans. In a DRIP, your dividends are automatically reinvested in shares (or fractional shares) of the company at no cost.

In the overwhelming majority of cases, you can enroll in a DRIP through the purchase of a single share, Nelson told Moneynews in an exclusive interview. The companies also allow you to buy additional shares through their DRIPs. In about 50 percent of DRIPs, you don’t have to pay fees for the shares, she says.

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Many of the companies that do charge for share purchases have a $5 fee plus a certain amount per share. “Very small investors should choose no-fee DRIPs,” Nelson says.

When you’re buying additional shares (or fractional shares), most companies will accept as little as $25, she says. You can invest weekly or monthly, and a lot of DRIPs accept automatic transfers from your bank account. “We recommend that so you tune out the market,” Nelson says.

“The virtue of the plans is that even the smallest investor can save in stock rather than in the bank,” Nelson says. “You won’t pay tax on the growth of your holdings until you sell.” To be sure, you will pay taxes on your dividends, even though they are re-invested into the company’s stock.

You can enroll in DRIPs by contacting participating companies directly or going through a group such as Temper of the Times Investor Services, of which Nelson is chairman of the board. Her group charges $30 per DRIP for members and $60 for non-members. Membership costs $100 a year.

If you enroll in a DRIP, your shares are held by the company’s transfer agent rather than in your brokerage account.

Lance Roberts, CEO of STA Wealth Management in Houston, has been investing in DRIPs for about 15 years. He owns about 15 of them and advises clients about investing in them too.

“If used properly, you get tax deferral because you will hold the stocks for a long time and reinvest the dividends,” Roberts told Moneynews in an exclusive interview. “But a good DRIP program only works if you contribute regularly” to buy additional shares, he says. “It’s like a garden performs better if it’s watered.”

In addition, you have to resist the temptation to sell your DRIP stocks when they decline, Roberts says. “It’s important as part of an investment program to say, ‘This is long-term, I won’t touch this money for 20 to 30 years.’”

Nelson notes that DRIPs allow investors to set up diversified portfolios with a very small amount of money. “You can set up your own mutual fund” with DRIPs, she says.

One downside of DRIPs, Nelson and Roberts agree, is tax accounting. Every time you buy shares of a company directly or with a dividend reinvestment, you are creating a new cost basis. And you must keep track of all these cost bases to figure out your capital gains tax if you sell the shares.

“At a brokerage firm they keep track of cost basis for you,” Roberts points out. “This is difficult to track if you don’t keep up with it. It’s not an easy vehicle for tax planning. That’s a major reason why many people don’t use DRIPs.”

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sapphire on April 9th, 2014

In today’s investing world, nothing seems to be more sacred than dividends. Whenever a company cuts its dividend, its share price plummets. So when companies need to raise money, a dividend cut falls to the bottom of every list when looking at potential sources of cash. And that will not change any time soon.

Outgoing TD Bank (TSX: TD)(NYSE: TD) CEO Ed Clark got a good lesson on just that when he changed the bank’s dividend policy. Just to be clear, he didn’t cut the dividend or even slow down future increases. Instead, from now on the dividend will be raised only once a year, down from twice a year. The move will give the bank more flexibility each year, but the change surprised analysts, and now Mr. Clark has had to defend the decision numerous times, most recently at TD’s annual meeting.

A comparison

Many investors buy bank stocks just for the dividend. All that matters to them is how much the dividend yields and how much it grows. With that in mind, here is how the different banks stack up.

Bank Dividend Yield 5-Yr Dividend Growth
Royal Bank 3.89% 7.3%
TD Bank 3.64% 9.0%
Bank of Nova Scotia 3.94% 5.49%
Bank of Montreal 4.11% 1.66%
CIBC 4.13% 2.41%

When looking at this table, one can understand why investors are so concerned about dividend growth at TD. The bank has delivered more of it than any other bank over the past five years. And as a result, investors are counting on that dividend to keep growing quickly in years ahead. This is partly why these investors are willing to accept a lower yield than at any of the other banks.

Compare that with banks like Bank of Montreal (TSX: BMO)(NYSE: BMO) and CIBC (TSX: CM)(NYSE: CM). The two banks have had the slowest dividend growth out of the big five, which is why investors are demanding a higher yield. Of course future dividend growth may differ dramatically from the past – but until it does, investors are still saying “show me.”

Foolish bottom line

You should never buy a bank just for the dividend; your total return will depend much more on the underlying fundamentals of the business. But there are a lot of investors who look at the dividend first, which is why Mr. Clark got so much blowback for the changed policy. Fortunately for the bank, even these investors will eventually forget about the changed policy if TD continues to perform as it has in the past.

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sapphire on April 3rd, 2014

WITH interest rates at record lows, the returns on savings accounts and term deposits aren’t all that exciting. But high quality shares can pay compelling dividends – and there is a way to get more bang for your buck.

Recent research by the Commonwealth Bank shows that almost 40% of Australians say they will invest more money during 2014. Around eight out of ten of these people expect to invest at least $3,000 more this year than they did last year.

That’s great news. The trouble is, the same study found that over 70% of Australians focus on a very narrow selection of investments when it comes to building wealth. Cash deposits, superannuation and property are still seen as the most effective methods to grow financial security. Shares and managed funds are the first choice for just 15% of the population.

This means plenty of ordinary investors are missing out on the upsides of shares.

One particular plus is the potential to earn healthy dividends. This is the portion of a company’s annual profit paid out to shareholders, and in the case of some of our best known companies like Telstra, National Australia Bank, Myer or Goodman Fielder, investors are enjoying dividend yields of more than 5%. That’s significantly higher than deposits are paying.

Even better, dividends can be lightly taxed in your hands, because shareholders get credit for any company tax paid. And many good quality shares will show price growth over time – so hopefully, you’re growing your capital too.

One approach with dividend payments worth considering is to opt for a dividend reinvestment plan (DRP).

These allow investors to reinvest their cash dividends by using them to purchase additional shares on the dividend payment date. So rather than receive a cash dividend payment, shareholders receive an equivalent amount in the form of new shares in the company.

Lots of listed companies offer DRPs. You can choose to participate voluntarily, and there can be valuable savings on the brokerage you would otherwise pay to buy the shares separately. The shares are also often sold at a discount, providing further value.

If you’re not relying on dividends as a source of income, a DRP can be worth considering, however there are downsides.

It’s important that you only reinvest dividends with companies you believe have a strong future. Otherwise you could end up having a large concentration of shares in a company that is falling in value – without the benefit of having received past dividends as cash in the bank.

Some companies also put a limit on the number of shares you can hold to participate in a DRP. As a guide, Woolworths imposes a maximum investment of 20,000 shares.

To learn more about investing in shares and dividend reinvestment plans, the website of the Australian Securities Exchange (ASX) has plenty of freely available information. This includes a booklet entitled ‘Getting started in shares’ – you can find it at Or take a look at my book Making Money.

Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.

March 26–Bank of America said Wednesday that it will increase its dividend, the first time it has done so since the financial crisis.

The Charlotte bank will now pay 5 cents per share each quarter beginning in the second quarter of this year, up from a penny per share. Bank of America will also repurchase $4 billion in common stock, a move that increases its earnings per share.

“Over the last few years we have focused on positioning the company to return capital to our shareholders,” CEO Brian Moynihan said in a statement. “We know that increasing the common dividend is important to our shareholders and we are pleased that we can continue to return excess capital through both repurchases and dividends.”

The news came shortly after the Federal Reserve announced it had no objections to Bank of America’s plans.

Wells Fargo, BB&T and 22 other banks also got approval from the Federal Reserve on their capital plans.

Wells Fargo will increase its dividend to 35 cents per quarter, up from 30 cents. The San Francisco bank will also repurchase about 350 million shares of common stock.

BB&T said Wednesday that its plans include a “conservative increase” of its quarterly dividend for common shareholders.

Five banks, including Citigroup and HSBC, had their capital plans rejected. That means they won’t be able to increase their dividends or stock buyback programs, Federal Reserve officials said. This is the fourth year in which the nation’s big banks have had to seek approval to return capital to shareholders through this process.

The dividend increase comes a week after the Federal Reserve released the results of its annual stress tests, which test the nation’s largest banks on whether they’d be able to keep minimum capital ratios in the event of a severe economic downturn.

Bank of America passed the stress test, but its capital levels came in lower than many of its peers. Based on the results, analysts had said the bank’s capital plans might be thrown into question.

Indeed, Bank of America was forced to resubmit its capital plan after some ratios fell below what is required in a severely adverse downturn, the Federal Reserve said Wednesday. The bank had to revise down the level of capital it would return to shareholders. Goldman Sachs also had to revise and resubmit its capital plan.

Still, Bank of America’s ultimate decision on its dividend was in line with analysts’ expectations.

Guggenheim Securities analyst Marty Mosby said the Federal Reserve’s results indicate Bank of America will have to increase its dividend more slowly than it would like in the years to come.

“I think they had a rosier picture,” Mosby said. “There’s a little bit of a limit on how fast they can increase (capital) deployment. You’re going to have to increase your capital position in order to get some more room.”

Wednesday’s decision is the first dividend change since 2009.

As recently as mid-2008, Bank of America’s quarterly dividend paid out 64 cents per share. That quickly plummeted to 1 cent per share as the financial crisis unfolded, and big banks such as Bank of America were propped up with billions in capital from the federal government.

Peers such as JPMorgan Chase and Wells Fargo didn’t drop their dividends as dramatically in the aftermath of the crisis and received the go-ahead to increase their payouts three years ago.

CEO Moynihan famously told investors in 2011 that Bank of America would likely raise dividends by the end of that year. The Federal Reserve ultimately rejected the bank’s request.

Bank of America’s dividend has been a regular bone of contention ever since. Shareholders during the bank’s past two annual meetings in Charlotte have repeatedly questioned Moynihan about when it would rise.

Wednesday’s dividend announcement likely won’t please all of them.

“Five cents a quarter is still not sufficient,” said Stephen Johnson, a Greensboro applied psychologist who has filed shareholder proposals with the bank in the past. “It is good news, but this is also a bank that should have done better for the last decade.”

Bank of America shares closed Wednesday at $17.18, well less than the $50 range in which it traded 2006 and 2007.

sapphire on March 19th, 2014

Cash goes in, cash comes out, right? Businesses that generate free cash flow, or those that eventually will, are what every investor should seek.
The problem is that not all shareholders need the cash coming out, usually as dividends. That is where dividend reinvestment plans (DRPs) come in.
The idea is that, instead of a dividend – cash coming out – the company issues you additional shares to an equivalent value. The question is whether they are worth it.

There are a few considerations. The first is whether the stock itself is underpriced, one of the golden rules of investing. If so, it may make sense to participate, especially as DRPs often offer stock at a small discount to the traded price and avoid broker commissions. To decide, keep an eye on your DRPs at dividend time and make judgments about the value on offer.
Using a perpetual DRP is a passive investment decision that does not help you improve your skills. Choosing whether to participate at the time of each dividend means you are taking an active role in stock selection, making you a better investor.
The second consideration is whether a DRP is the right option for you regardless of its price. For example, if you want to keep things simple, you could buy a listed investment company with a DRP, allowing you to compound your returns over the very long term. You might also use a DRP if you do not trust yourself with the cash.
But with more than 2000 companies listed on the ASX, it is unlikely that the stocks you already own are the best-value investments on offer. If your portfolio is small or otherwise poorly diversified, why keep adding to existing holdings? Instead, you should accumulate your dividends in a dedicated bank account and invest the proceeds in attractively priced stocks.
After that, if you have established that a DRP does offer value and is the best use of your cash at the time, you need to establish the reason why the company is offering it.
In difficult times, rather than cancelling or reducing the dividend – the sensible course of action – some companies underwrite their DRP (issue shares to a third party to obtain cash to pay the dividend). This is tantamount to not paying a dividend at all.
As a rule, you should avoid companies that deliver regular and substantial increases in the number of shares on issue over time. DRPs, option issues, performance shares, capital raisings and the like all dilute the interests of non-participating shareholders.
There is no real reason why large companies with liquid share registers need to issue shares to satisfy their DRPs. Westpac, for example, buys shares on the market and then transfers them to DRP participants. Other companies buy back shares over time to offset dilution from their DRPs. This is the sort of shareholder-friendly behaviour you should seek out.
Finally, investing in DRPs requires more paperwork. A dividend is assessable income whether you receive it as cash or shares, so put aside some cash from other sources if you’ll need to pay tax on the dividend.
Also, dividend reinvestment is a separate share purchase that makes administration more complicated.
For many investors, a DRP is more trouble than it’s worth. The decision to participate is less than straightforward. Companies that offer DRPs may have capital-creep issues and may not be the best investments.
But if you can find underpriced stocks with DRPs, by all means participate. Just cancel your
election when the stock is no longer obviously underpriced.
This article contains general investment advice only (under AFSL 282288). Nathan Bell is research director of Intelligent Investor Share Advisor. For a 15-day free membership, including 23 buy recommendations, see

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