Seven Highest Yielding Stocks Going Ex Dividend in November

Investors occasionally use a stock trading technique called 'Buying Dividends,' which is the technique 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. This technique generally works only in bull markets.

If you are interested in buying dividends, there are many stocks in many different industries 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.

All of the following stocks have market caps over $500 million, and yield over 2%:

• Nordic American Tanker Shipping Limited (NAT) - The stock is going ex-dividend on 11/18/2008 and pays a yield of 13.7%. The stock has a P/E of 15.
• Thomson Reuters PLC (TRIN) - The stock is going ex-dividend on 11/18/2008 and pays a yield of 5.5%. The stock has a P/E of 6.
• Sonoco Products Company (SON) - The stock is going ex-dividend on 11/19/2008 and pays a yield of 4.8%. The stock has a P/E of 13.
• Thomson Reuters Corporation (TRI) - The stock is going ex-dividend on 11/19/2008 and pays a yield of 4.1%. The stock has a P/E of 25.
• Liz Claiborne, Inc. (LIZ) - The stock is going ex-dividend on 11/19/2008 and pays a yield of 3.1%. The stock has a forward P/E of 7.
• Parker-Hannifin Corporation (PH) - The stock is going ex-dividend on 11/18/2008 and pays a yield of 2.6%. The stock has a P/E of 6.
• Cummins Inc. (CMI) - The stock is going ex-dividend on 11/19/2008 and pays a yield of 2.4%. The stock has a P/E of 5.

Disclosure: Author does not own any of the above.

Comments

[b3rkut:]

Quick question:

If a stock is going ex-dividend soon, has the company already declared that they will pay $x for the forthcoming payment?

Is the dividend guaranteed for the forthcoming payment, or can management still cut it?

2008 Nov 07 04:13 AM

[grbn:]

I'm thinking NAT's div is higher, like over 18%. Plus, the price drops by the amount of the div on ex-div date and "may" not come back anytime soon.
(the exdiv is announced, as the record date, when the div is announced so the forthcoming payment is a done deal. buy before exdiv date)

2008 Nov 07 08:14 AM

[Know Nothin...:]

Stock prices reflect the anticipated dividends already.
Buying stocks before the dividend day is like someone seeking higher interest rate and keep switching the saving bank accounts.
Protecting the capital and seeking reasonable growth is the key concern for most of the people.

2008 Nov 07 08:19 AM

[Tim Plaehn:]

If the dividend has been declared, it will be paid. Check the stock for press releases. NAT just declared a $1.61 dividend to be paid to holder of record on 11/21. Buy a bunch!

2008 Nov 07 08:19 AM

[Scooter-Pop:]

If you believe these Ex-Div Stocks will rise in price over the next 24 months, then the BUFFET Strategy of Dividend Reinvestment Planning "DRIP" is a SOLID Exponetial Growth Opportunity!!

2008 Nov 07 08:31 AM

[Dividend Gr...:]

That's a very risky strategy, where you are not investing but speculating that you would be getting something for free - both dividends and small capital gains.

People have been trying similar dividend capture strategies for decades with poor results. At least they add liquidity to the markets.

2008 Nov 07 10:09 AM

[copesetic:]

ABR goes ex 11-12,with close to a 20% yield
disclosure--------all in

2008 Nov 07 10:10 AM

[notsosmart:]

its a poor way.if you are young with time on your side try drip plans. worked great for me.you can even buy shares from some cos directly avoiding brokerage fees.

2008 Nov 07 10:30 AM

[Malkiel:]

Some suggestions for playing this--

Firstly, only do this in a deferred account like an IRA or 401k/403b/457. There's no point in doing any kind of short term buying/selling in a taxable account unless you're a day-trader.

Consider delaying your buy until a good few weeks past the ex-dividend date. You can consult charts to see what happens to the stock between ex-dates: typically they decline, then begin to go up as buyers come in for the next dividend. Get your shares after they've lost some value between dividend payouts.

When the next ex-dividend date is coming, see how the share prices are moving. If you are up more per share than the value per share of the dividend itself, sell and take that as your profit. Otherwise, hang in for the dividend. After all, you don't care how you get your profit, you just want a good chunk in a short time frame.

Repeat steps one and two next month, rinse and spit...

2008 Nov 07 11:58 AM

[Dividend Gr...:]

Notsosmart,

I totally agree with you on this one - if you start early your dividend income would be huge after several decades. However in this day and age it is possible to cut investment costs to the minimum by choosing low cost brokerages like Zecco.. I also think that Bank of American also offers free trades to customers whose net worth is over a certain amount.

2008 Nov 07 11:59 AM

[Universal H...:]

Those of you who are attracted to the strategy of "buying dividends", but who don't have the time to pursue it, might consider one of the professionally managed CLEFs whose investment objective is essentially the same thing.

2008 Nov 07 05:19 PM

[Sapphire:]

I'd definitely be interested in some CEF recommendations which practice the strategy.

2008 Nov 08 03:22 PM