For a Dividend Growth Investor (DGI) like readers of this blog and yours truly as well, Ex-Dividend date (or simply ex-date) is very important date like a D-Date. If you own a share prior to this date, you get to receive the dividends as passive income. For example: If you buy a stock on 8/31 and ex-dividend date is 9/01, and sell it on 9/01, you will keep the dividends, even if you own the share for just a single day. This is miraculous power of Ex-Dividend date and that’s why DGI investors look at these dates and consider as “one” of the factor while purchasing stocks, besides P/E (price/earnings) ratio, PEG (price/earnings to growth) ratio and many others. Note that: if you purchase a stock on its ex-dividend date (9/01), you will not receive dividends, you generally need to buy at-least 1 day (8/31) prior to this date (9/01).
On day of Ex-Dividend Date, dollar amount of dividends is subtracted from stock price and stock is re-priced at a new price when the opening bell rings at exchange (NYSE or Nasdaq). This is done to protect new buyers and someone taking unfair advantage. Total value of the stock on ex-dividend date and prior date are therefore theoretically same, of-course, stock price can still change on, prior or after ex-date due to other economic or other reasons.
Typically, these dividends are paid after a period of time: it could be ranging from days to few weeks, when you get your passive income paycheck in the mail; you get to cash in at your bank or restock cash for next buy or even drip back to the same stock.
Due to its immense importance of Ex-Dividend dates, I’m writing this post so that readers can consider this factor in their buying calculus for coming month. Here are the Ex-Dividend dates for the stocks that I have in my Portfolio, Pay date and Dividends per share.
|Company||Symbol||Ex-Div Date||Pay Date||Div/share|
|National Oilwell Varco, Inc.||NOV||9/9/2015||9/25/2015||0.46|
|BHP Billiton plc||BBL||9/9/2015||9/29/2015||1.24|
|Digital Realty Trust, Inc.||DLR||9/11/2015||9/30/2015||0.85|
|Altria Group, Inc.||MO||9/11/2015||10/9/2015||0.565|
|Gilead Sciences, Inc.||GILD||9/14/2014||9/29/2015||0.43|
|New Mountain Finance||NMFC||9/14/2015||9/30/2015||0.34|
|Keurig Green Mountain Inc.||GMCR||9/25/2015||10/29/2015||0.2875|
|Starwood Property Trust, Inc.||STWD||9/28/2015||10/15/2015||0.48|
Sometimes, companies will announce special dividends, however, they are not frequent and should not expect one. If you get it, consider it as a bonus that was given to you with your regular monthly or quarterly paychecks.
Full Disclosure: Long on all above mentioned stocks.
Do you consider Ex-dividend dates in your buying decision? Love to hear your take.