Three Stocks Going Ex-Dividend in Late June

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 June. They came up with over 25 companies all with market caps over $500 million. Here are a few examples showing the stock symbol, the ex-dividend date and the yield:

• H.J. Heinz Company (HNZ) 6/22/09 4.56%
• Piedmont Natural Gas Company, Inc. (PNY) 6/23/09 4.66%
• Portland General Electric Company (POR) 6/23/09 5.43%

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 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.

Disclosure: Author doesn't own any of the above.

Comments

[capt Brian:]

More money has been lost chasing dividends than in any other endeavour. Author unknown, but be careful, anything so easy has pitfalls.

Jun 09 08:50 AM

[khaz:]

An alternative for some folks is the Eaton Vance closed end funds (EVT, ETG, ETO). I prefer letting the pros do this kind of work.

Jun 09 01:07 PM

[Just Say Whoa!:]

"This technique generally works only in bull markets."

Folks, you've been officially warned!

This strategy may have been "safe" back at the market bottom in March, but is now considerable riskier...

Jun 09 06:49 PM

[Smilin Jack:]

Fools rush in where investors fear to tread. At todays prices you would have....HNZ-36.20@100 shrs,Div.$.42/$42.00 - PNY-24.30@100 shrs., Div. $.28/$28.00 - POR-18.59@100 shrs.,Div.$.25/$25.00
TOTAL $95.00 Profit. Trade costs @ 8.00 avg.= $48.00 ($24.00 buy & $24.00 sale) and tax of avg.25%- $23.75 = $23.25 Net
Now with all this work one needs to pray that the stock appreciates back up to the buy price when selling. To purchase more shares than 100 shrs. does nothing but to increase sale price risk.

Jun 10 07:52 AM

[mbkelly75:]

Another place to get ex-dividend dates and information without having to download an Excel spreadsheet is:
ex-dividend.com/index.... . Click on free services at the top of the page. I use ex-dividend and dividend pay dates to help me pick a good time to buy a dividend stock that I already want. If I have more than one stock that looks good but one of them is about to go ex-dividend - that is the one I buy. Most of the time, a stock will drop by the amount of the dividend that is paid but will go back up to it's before dividend price in a fairly short time. Bear market drops can lengthen the time needed but it is generally workable. There is at least one advisory letter that specializes in this type of play and they have been averaging 21% profits annually for several years now so you can make money in Bear and Bull markets this way. You just have to be careful of what stocks you use this method with rather than use for just any old stock. Stocks with a 5+ year record of raising dividends are the best choice for this play in any market.

Jun 10 11:19 AM

[JosephN:]

Buying Dividends is a terrible strategy because you incur a tax liability (that of the dividend).

Explanation:
I'm pretty sure the stock price is automatically marked down by the value of the dividend paid out at the exchange so there is no effective difference in price between buying the stock before the dividend is paid, and buying the stock after the dividend is paid, as the after stock price is automagically discounted by the dividend amount.

Excepting that if you buy the stock before the dividend is paid you have to pay taxes on the dividend amount. If you buy after the dividend is paid you don't have to pay taxes on the price discount you receive from the dividend markdown.

So buying dividends seems like a good idea, but really its a foolish thing to do.

Jun 10 11:58 AM

[notsosmart:]

over the years i did well.bought & held good co's that paid a fair div joined their "drip" programs so i $ averaged,paid little or no fees over the years(some co's let you buy direct) & then when i retired left the drip programs & received the total divs plus my ss & have a good retirement.buy & hold is great as my yield(income was 7.2%) @ a 15% max income taxlast year.bought more as the market near bottom & waiting for another drop to buy more.if you enter @ a good price this works.i have no agenda & not affiliated with anyone.

Jun 11 05:24 PM

[CPST1:]

Plan B: Covered Calls

Jun 11 09:09 PM

[JosephN:]

I guess some people don't know the difference between the trading strategy of "buying the dividend" vs owning a stock for its dividend, with or without covered calls.

Homework people.

And in case you can't figure it out from my post above, rest assured that the best day (given no news) to buy a dividend stock is right after the dividend is paid out and the stock price has been discounted.

Jun 12 11:31 PM