Here is our latest update on the stock trading technique called "Buying Dividends." This 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. This technique generally works only in bull markets. In flat or choppy markets, you have to be extremely careful.
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.com has compiled a downloadable and sortable list of the stocks going ex-dividend during the next week or two. The list contains many dividend paying companies, all with market caps over $500 million, and yields over 2%. Here are a few examples showing the stock symbol, the market capitalization, the ex-dividend date and the yield.
- DNP Select Income Fund Inc. (NYSE:DNP) market cap: $2.2B ex-div date: 2/24/2011 yield: 8.4%
- Johnson & Johnson (NYSE:JNJ) market cap: $170.9B ex-div date: 2/25/2011 yield: 3.5%
- MGE Energy, Inc. (NASDAQ:MGEE) market cap: $979.1M ex-div date: 2/25/2011 yield: 3.6%
- Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL) market cap: $259.5M ex-div date: 2/25/2011 yield: 3.4%
- Fifth Street Finance Corp. (NYSE:FSC) market cap: $683.5M ex-div date: 2/25/2011 yield: 10.2%
Don't forget to reconfirm the ex-dividend date with the company before implementing this technique.
Disclosure: Author did not own any of the above at the time article was written.