Dividends Questions

Last post 07-11-2009 7:31 PM by azbrats. 5 replies.
Page 1 of 1 (6 items)
Sort Posts: Previous Next
  • 07-04-2009 1:51 PM

    Dividends Questions

    Happy 4th everyone.

    I have been trying to figure out when to buy stocks for the dividends and I'm a little confused. For example, I have been looking at VZ...

    US Earnings Calendar at Yahoo shows VZ with earnings announcements for Monday, July 27

    1) Will this be the first earning report or is there somewhere they would post expectations before July 27th?

    Yahoo Qoute shows:
    Ex-Div Date: 02-Aug-09
    Ex-Dividend Date: 08-Jul-09

    2) Whats the differnce between Ex-Div and Ex-Dividend?

    3) If I bought before the previouse days close would I still recieve the dividends?

    Thanks for any help,

     

    Steve

     

  • 07-06-2009 11:13 PM In reply to

    Re: Dividends Questions

    There are people in here that I know would be able to answer all your questions.

    Unfortunately, I'm going to give you the Melany view of stocks with dividends...

    After much reading, and a few surprise dividends showing up in my Portfolios, I started looking for companies that offer dividends year after year... and there are still many.  I am not perfect at the next step, but I am getting better... I try to buy mostly stock that offers dividends... and I hold it ... if it doesn't drop through the floor.  If it drops, I work on averaging down... but I usually forget to look at those dates, so I get nice surprises when they pay.

    What I watch for is that "still pay dividends", not the dates...

    Which means you may be holding it for a long time before you get a dividend because they paid just before you bought...

    I hope one of the dividend gurus come along ... I want to learn how to read those, too.  Angel

    GOOD LUCK and HAPPY TRADING!

     

  • 07-09-2009 4:48 PM In reply to

    Re: Dividends Questions

    At Yahoo, the ex-dividend date is definitely the important date. You don't need to worry about the "ex-div" date. While I have not yet figured out what the "ex-div" date is, I do know that it doesn't matter to someone concerned about the first or last days one can buy or sell a stock and still get a dividend. You can verify the truth of what I'm saying by just picking a random dividend-yielding stock whose ex-dividend date was relatively recently and then go to Yahoo Finance and type in its ticker symbol and look down on the right at the "ex-dividend date," and then open another browser and look for a recent dividend announcement story by that company and read it. And just in case you don't already know, the reason the ex-dividend date is important is that this is first date the stock trades without the dividend (hence the name "ex-dividend"). In order to get a dividend of a stock you don't already have, you must buy it at some point on the day BEFORE the ex-dividend date. Anyone buying on the ex-dividend date will be too late. Similarly, if you're looking to make sure not to sell it too early, you need to wait to sell it until the ex-dividend date starts. If you sell it one day before the ex-dividend date, you will miss out. So buy one day before the ex-dividend date, and sell on the ex-dividend date, if your only concern is dividends. You can ignore the "record date" as well. You'll see this used in company announcements that say something like, "This dividend will be paid to shareholders of record as of __________," and whatever date is in that blank line is known as the "record date." The "record date" is almost always two business days AFTER the "ex-dividend date." It's not good enough to buy the stock on the "record date" or even the day before, and you can still get the dividend if you sell the day before the record date. The only reason the "record date" is ever important is if you don't know the ex-dividend date--in that case you can get out your calendar and count two business days back from the "record date" to find the "ex-dividend" date. The only date you really need to know is the ex-dividend date (and the day just before it). Buy the day before the ex-dividend date, and sell on the ex-dividend date.
    Filed under:
  • 07-09-2009 4:56 PM In reply to

    Re: Dividends Questions

    I do want to point out, though, that it's hard to get a free lunch, and you'll have to do some research in order for any sort of dividend capturing strategy (buying just before the ex-dividend date and selling on the ex-dividend date) to work out for you vs. a buy-and-hold strategy. Typically, the price of the stock at any given time already accounts for these dividends and dates. In other words, it is generally going to be the case that any given stock, throughout the ex-dividend date, will trade at X amount lower than it otherwise would've, where X is exactly the amount of the dividend. At various times, it may appear that the ex-dividend date had some kind of effect on the price (other than the obvious effect of reducing the price by the amount of the dividend), or seemed to fail to cause the lowering of price one would normally expect (which might lead you to believe that there's a potential free lunch if you were to buy the day before the ex-dividend date and sell on the ex-dividend date next time around), but the thing you have to remember is that you don't know what would've happened had that stock been a non-dividend stock. It's not good enough to just look at the price of a stock at closing on the day before the ex-dividend date and compare it to various prices on the ex-dividend date, because stock prices change all the time for lots of different reasons that have nothing to do with dividends and dates. A dividend is best thought of as a chunk of the price which is taken off between the day before the ex-dividend date and the day of the ex-dividend date, and not like something that just comes from out of nowhere that you can collect for free if only you buy and sell at the right time. The reason dividends are important to many investors who gravitate towards dividend stocks is not that they get a free lunch that way, but instead because the dividend says something about the business. Many people will tell you that a recent dividend decrease might indicate trouble, for example. Another reason some people who like dividends like them is that they like not having their entire investment along with its gains wrapped up in a stock where the only way to get it is to sell and incur a commission. Dividends for retirees can be very important for this reason. Some will tell you that a dividend capture strategy (buying just before the ex-dividend date and selling on the ex-dividend date) tends to work out well in a bull market but not in a bear market, but there's no convincing evidence for either proposition as far as I can tell. In other words, I do not think that you would end up profiting any more from a dividend capturing strategy in a bull market than you would if the same stock gave no dividends and you bought and sold it on the same date. However, if you work very hard at this, and research enough, you may find that there are some small opportunities to exploit in terms of dividend capturing, especially if you have a lot of money to invest. I am not an expert, but, for example, it could conceivably be the case that an abnormal number of people sell certain stocks or certain kinds of stocks on the day or days before the ex-dividend date to purposely AVOID collecting a dividend because of the different tax treatment given for dividends vs. capital gains/losses--if a lot of people would generally prefer to not get the dividend amount in dividend form and instead take what is presumably about the same amount of money except in terms of a capital gain/loss, then you might be able to exploit that sort of phenomenon by figuring out when it happens, which stocks it tends to happen with, and then buying those at the right time before the ex-dividend date and selling at the right time on or after. With a small amount of money to invest, you're probably better off spending your time figuring out what companies to invest in, and possibly whether it's a good time to invest in companies at all, than you are trying to get a free lunch by buying various stocks the day before the ex-dividend date and hoping you can sell the next day and turn a profit. Generally-speaking, putting a whole lot of work in attempting to get a free lunch by capturing dividends is a fool's errand and a waste of valuable time.
    Filed under:
  • 07-10-2009 5:58 PM In reply to

    Re: Dividends Questions

    I was hoping someone would come explain it all to us!!

    Thanks, polyorchid!

    That helps me a lot.

    And the last line says it all to me:

    "Generally-speaking, putting a whole lot of work in attempting to get a free lunch by capturing dividends is a fool's errand and a waste of valuable time."

    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

     

  • 07-11-2009 7:31 PM In reply to

    Re: Dividends Questions

    polyorchid - Wow that was clearer and more thought out than anything I have found Goggle' ing the topic, Thank You  

Page 1 of 1 (6 items)