Friday, July 10, 2009

Stocks Going Ex Dividend during the Last Half of July

If you want to try the stock trading technique called 'Buying Dividends,' which is the process of buying stocks before the ex dividend date and selling the stock shortly after the ex date at about the same price, yet still being entitled to the dividend, there are many stocks to choose from. This technique generally works only in bull markets.

When you buy dividends, there are many stocks in many different sectors to choose from. In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date, and you can't sell the stock until after the ex date. The actual dividend may not be paid for another few weeks. WallStreetNewsNetwork has compiled a free downloadable and sortable Excel list of the stocks going ex dividend during the last half of July. They came up with many companies all with market caps over $500 million. Here are a couple examples showing the stock symbol, the ex-dividend date and the yield:

Foot Locker, Inc. (FL) ex div date: 7/15/09 market cap: $1.5B yield: 6.2%

RPM International Inc. (RPM) ex div date: 7/15/09 market cap: $1.7B yield: 5.9%

Caterpillar Inc. (CAT) ex div date: 7/16/09 market cap: $18.4B yield: 5.5%

The rest of the ex-dividend stocks can be found at wsnn.com. If you like dividend stocks, you should check out the high yield utility stocks and the Monthly Dividend Stocks at WallStreetNewsNetwork.com or WSNN.com. For more details on dividend definitions, check out definitions of dividend dates. Don't forget to reconfirm the ex-dividend date with the company before implementing this technique.

Author doesn't own any of the above.

By Stockerblog.com

3 comments:

Unknown said...

First I just want to say, thanks for writing. I enjoy reading your posts.

Secondly, I have a question for you. I found out about "Buying the Dividend" off of one of your posts. Since then I have done quite a bit of research on the idea and most of the written research isn't very flattering. However, most of the practical research says that this strategy can and does work very well if employed conservatively.

I was wondering what your thoughts on the strategy are, if you employ the strategy yourself, how well it does or doesn't work for you.

So far my conclusions are these.

For this strategy to be effective you have to have a large sum of money and possibly split that sum up into 3 or 5 parts to prevent a single stock from wiping you out. Holding for 61 days to avoid the 35% taxation seems silly if you can sell before that time frame and make a higher profit. If you buy as close to the PR announcement as you can then you have a very good chance of being able to sell at the top of the Dividend Hype for more profit than if you waited for the Dividend to roll around and then sold for a few pennies more than what you bought it. The Taxation is the most talked about flaw with this plan...but I say profit is profit, I'll gladly be taxed on 1 Million than take a anemic profit that is not taxed.

I have not tried this strategy out yet but I will be ready sometime this year. I'm interested to hear your thoughts or counteract my assumptions that may be incorrect.

Thanks again

Stockerblog said...

Hi Jason

I agree with pretty much everything you described, however, I would add one thing. It seems to only work well in bull markets.

One other thing I've been successful at in flat markets is checking high dividend stocks 2 or 3 weeks before they go ex, wait for any negative news or strong drops in the market, then I buy the stock, usually the stock will gradually increase as it approaches the ex date, and then I sell it on the day before the ex date and forget about the dividend, knowing that the stock will drop on the ex day, and just be happy with the short term capital gain.

You a definitely right about ignoring the tax consequences.

Whatta said...

"In order to be entitled to the dividend, you have to buy the stock before the ex-dividend date,"

to clarify your post a little bit more, you must buy the stock before the "of record" date, not the ex-div date. And it usually takes a trade three days to settle, so you need to add that into the mix as well.

I like to play PM and WIN at divvy time.