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You have to be the owner of record before the ex-dividend date, which is not the same day as the date the dividend is paid. This also implies that if you sell on or after the ex-dividend date, you'll still get the dividend, even if you no longer own the stock.
Keep in mind, also, that the quoted price of the stock (and on any open orders that are not ...
38
The market is not stupid. It realises that a company is worth less after paying out dividends than before paying them. (It's obvious, since that company has just given out part of its earnings.)
So after a company pays out dividends, its stock price normally drops approximately by the amount paid.
Therefore if you buy, get the dividend, and immediately ...
31
I started to close this as a duplicate of If a stock doesn't pay dividends, then why is the stock worth anything?, but then realized that it is a slightly different question:
suppose a stock price were to continuously drop despite high company performance (profits)... Is there something the shareholders can do to get some share of the profits?
As a ...
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There is not a direct advantage (meaning that do not produce actual wealth as you mention), but it can be an indication that the company is a good stable investment. If a company pays dividends, then typically that means that the company is healthy enough (has enough excess cash flow) that it can redistribute it to shareholders rather than investing it back ...
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In the end it comes out of earnings, but the earnings don't have to be made that financial year. So yes you can pay dividends despite negative, zero or low earnings in a specific year. This can be a strategic consideration of the company called dividend continuity.
This is based on German Law (§ 150 AktG), but should be applicable elsewhere as well.
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Cash dividends are paid from the company's cash on hand. It doesn't matter where that money comes from. You might have earned it that year, previous years, or (rarely and foolishly) borrowed it or retained it from a stock offering, etc.
A cash dividend is funds or money paid to stockholders generally as part of the corporation's current earnings or ...
13
Ultimately, if you own the company, you can vote to shut down the company, sell everything it owns and give the money to the shareholders.
You can also vote for the company to start paying dividends.
Basically, the money in the company is not locked in the company, even if it's staying there for the time being. Eventually the shareholders will get some of ...
12
Do not confuse the DIV (%) value and the dividend yield.
As you can see from this page, the DIV (%) is, as you say, 165%. However, the dividend yield is 3.73% at the time of writing.
As the Investopedia page referenced above says:
The payout ratio is calculated as follows: Annual Dividends per Share / Earnings per Share.
which means that the ...
8
The ex-dividend date, prevents this, but people are still able to do this and this is an investment strategy.
There are some illiquid and immature markets where prices don't adjust.
In the options market people are able to find mispriced deep in the money calls to take advantage of the ex-dividend date. It is called dividend capture using covered calls.
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No, your analogy is not the same as buying a non-dividend-paying stock.
A better analogy would be you buy 50% of a house where the profits all go in a bank account that you "own" half of but can't withdraw from (and neither can the other owner). All you can do is sell your ownership to someone else or wait until the money eventually does get ...
7
They had a lot of free advertisement on the international press and the web.
People like me, who never heard of GameStop before, now know what they sell (used games, consoles, etc.), how they do it (at physical stores, but planning to sell more online), that they have many fans, the usual value of their stock, that they are having to close stores, and much ...
7
It avoids building castles in the air
Extremely simplified: there are two factors contributing to a stock price. The first part is a fundamental value, based on the company's earnings, its dividend, the expected future growth. Analysts make this look like an exact science by computing two digits behind the comma but it is not. Predictions about the future ...
7
So my question is... suppose a stock price were to continuously drop despite high company performance (profits)... Is there something the shareholders can do to get some share of the profits?
This seems like a faulty premise. The stock price is based on the market's estimate of the company's future prospects. It's unlikely that a company that has high ...
6
When buying stocks the latest you need to buy to get the dividends is the day before the ex-dividend date. If you buy on the ex-dividend date you will miss out on the dividends.
So if you are shorting stocks the latest date you can cover your position and not have to pay out the amount of the dividend is the day before the ex-dividend date.
If you are ...
6
This is a really common idea that I've seen lately. It's usually part of a rationalization about how owning stock in a company is no different than owning something that is only worth what someone will pay you for it e.g. Bitcoin.
There are lots of ways to debunk this but I think the easiest way to see why this isn't (normally) the case is to ignore large ...
5
Investors have different targets, and for some a continuous stream of dividends is more important than the value gain of the share itself.
For example, AT&T is a well known provider of 50 cent dividends per quarter; so if you buy them today for 30$, they will produce 6.67% per year continuous income stream: 4 * 0.50$ / 30$ = 6.67% (of course assuming ...
5
Just for clarification, a stock's share price drops by the exact amount of the dividend on its ex-dividend date. When trading begins anew that morning, the stock may go up, down or be unchanged.
You are correct. Investors just break even each time a dividend is issued because the value of their equity goes down by the same amount as the dividend. A ...
5
Dividends and speculation aren't the only upsides to owning a stock.
The company could decide to execute a stock buyback. This will increase demand for the stock you own and drive up the price.
The company could be acquired, raising the stock price substantially.
The company could decide to start paying dividend.
The shareholder could vote to alter the ...
4
If you think that the stock is, on average, going to go up, then not buying it immediately represents a loss of expected value. If you don't think the stock is going up, then you shouldn't buy it at all. Stock prices are a random walk. Buying a stock right after its price goes down has no greater expected return than buying a stock in general.
3
You assumed correctly that they are pooled together. Here's some more info just in case:
Just like a regular stock, an ETF will have an ex-dividend date, record date and payment date.
All dividends between distributions are pooled together and stored somewhere. This storage location can be found in your ETF's prospectus (e.g. a non-interest bearing savings ...
3
There are two main solutions: pay out, and reinvest. In one case, the ETF investors get cash; in the other case the ETF gains in value as it holds more of the underlying assets. Each ETF will document what choice it made - typically this choice is fixed when the ETF is created. Also some details of the implementation may be documented. Payout frequency or ...
3
Yep, there just is no free lunch.
So called high dividend stocks are usually from companies that have stable cash flows but relatively little or moderate growth potential. Utility companies come to mind, let's take telecommunications as an example.
Such stocks, usually, indeed are considered more conservative. In a bull market, they won't make high jumps,...
3
Yes it is dividend per a share. Without knowing the company or at least the share price it's hard to be more precise. And each site has their own formula for calculating the various ratios. Bloomberg seems to go off the latest announcement. For example IBM announced Tuesday April 24 that they will raise the quarterly dividend to $1.57 a share. Bloomberg ...
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Yes, it is the dividend per share, in dollars (assuming a U.S. stock), usually paid quarterly. For most stocks, if you multiply that number by 4 and divide by the stock price, you will get the dividend yield in the previous line.
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Your question reminds me of a Will Rogers quote:
buy some good stock, and hold it till it goes up, then sell it. If it don’t go up, don’t buy it.
There's no way to prevent yourself from buying a stock that goes down. In fact all stocks go down at some times. The way to protect your long term investment is to diversify, which increases the chances that ...
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It would be 0.22 * Rs 5 per share, i.e. Rs 1.1 per share. For 1000 share it would be Rs 1.1 * 1000, i.e. 1100
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Stock acquired through a (non-taxable) stock dividend has the same holding period as the stock on which the dividend was paid.
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One practical solution is to invest in an ETF like DGRO. Currently it is yielding 2.29%, so to live off of divdends, you have:
(1500*12) / .0229 = 786,000.
At $500/month, you have some work to do.
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A company's share price typically has 2 impacts on its internal operations:
(1) If it needs additional funding to accomplish its goals [like expanding to new locations], then it could do that by (i) waiting for accumulation of net earnings to fund expansion; (ii) take on more debt; or (iii) offer additional equity [like more shares offered to the market].
...
3
Bermuda is not an independent country but a British Overseas Territory.
This page from PricewaterhouseCoopers says that "there are no withholding taxes in Bermuda". Whether that is enough for you is for you to decide.
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