When a company is considered to be ex-dividend it simply means that a declared dividend belongs to the seller rather than the buyer. A stock will be given declared status if a person has been confirmed by the company to receive the dividend payment. At this point, the person who owns the security on the ex-dividend date will be awarded the payment, regardless of who currently holds the stock. After the ex-date has been declared, the stock will usually drop in price by the amount of the expected dividend. That said there are three companies that will be going ex-dividend on August 27th.
Everest Re (RE) which closed trading on Friday at $103.40/share will be going ex-dividend at the close of trading on Monday, August 27th. The Hamilton, Bermuda firm, which currently yields 1.90% ($1.92), together with its subsidiaries, underwrites reinsurance and insurance in the United States (U.S.), Bermuda, and international markets. It operates in four segments: U.S. Reinsurance, Insurance, International, and Bermuda. There are two things that I consider very positive catalysts when it comes to RE. First, I love the fact that insiders currently hold 19.24% or 9.97 million shares of the total number of shares outstanding which is 51.86 million shares, if we compare those numbers to some of RE's competitors we'll notice that insiders only hold 13.98% of White Mountains Insurance Group (WTM). The second thing I like about RE is the fact the company has demonstrated strong EPS results in three out of the last four quarters with the only anomaly coming during the December 2011 quarter when RE missed estimates by 32.40%.
Mattel (MAT) which closed trading on Friday at $35.65/share will be going ex-dividend at the close of trading on Monday, August 27th. The El Segundo, California firm, which currently yields 3.50% ($1.24), together with its subsidiaries, designs, manufactures, and markets various toy products. Its products comprise fashion dolls and accessories, vehicles and play sets, and games and puzzles. The company offers its products under the Mattel Girls and Boys brands, including Barbie, Polly Pocket, Little Mommy, Disney Classics, Monster High, Hot Wheels, Matchbox, Tyco R/C, CARS, Radica, Toy Story, WWE Wrestling, and Batman; Fisher-Price brands comprising Fisher-Price, Little People, Baby Gear, View-Master, Dora the Explorer, Go Diego Go!, Thomas and Friends, Mickey Mouse, Sing-a-ma-jigs, See N Say, and Power Wheels; and American Girl Brands, such as My American Girl, Bitty Baby, McKenna, and the newest Girl of the Year. When it comes to MAT, I like the fact the company has demonstrated decent EPS results in three out of the last four quarters with the only anomaly coming during the March 2012 quarter when MAT missed estimates by 14.30%. It should be noted that MAT surpassed estimates during the December 2011 and June 2012 quarters and reported results that were in-line with estimates during the March 2012 quarter. Comparably speaking, Mattel has managed to outpace direct competitor Hasbro (HAS) in terms of EPS over the last four quarters. Hasbro had only managed to surpass estimates twice by an average of 22.25% and miss estimates in both the September 2011 and March 2012 quarters by an average of 26.15%.
KeyCorp (KEY), which closed trading on Friday at $8.35/share, will be going ex-dividend at the close of trading on Monday, August 27th. The Cleveland, Ohio firm, which currently yields 2.40% ($0.20), is a holding company for KeyBank National Association that provides various banking services in the United States. The company's Key Community Bank segment offers regional banking services, including deposit and investment products; personal finance services and loans comprising residential mortgages, home equity, and installment loans; deposits, investment and credit products, and business advisory services to small businesses; and financial, estate and retirement planning, and asset management services to high-net-worth clients. When it comes to KEY, I like the fact the company has demonstrated very solid EPS results in each of the last four quarters which have surpassed estimates by an average of 10.85% and has also managed to demonstrate solid profit (21.33%) and operating margins (31.10%) outpacing such banks as Citigroup (C) (which demonstrated a profit margin of 16.33% and operating margin of 21.41%) and Bank of America (BAC) (which demonstrated a profit margin of 13.29% and 21.64%).
Potential investors looking to establish a position in either RE, MAT or KEY should do so with a small to moderate position and add to that position as dividend and earnings announcements approach. Although all three companies currently have very conservative yields, I'd keep an eye out for continued growth and revenue generation, as the latter could equate to increased dividends in the next 12 - 24 months.