Most income-based investors use a strategy involving purchasing shares on or before the company's ex-dividend date. On the ex-dividend date, the person who owns the security 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 I wanted to not only consider these companies from an ex-dividend perspective, but demonstrate how all three also outpace their competition in terms of operating margin.
Amaren Corp. (NYSE:AEE), which closed trading on Friday at $32.72/share, will be going ex-dividend at the close of trading on Monday, September 10. The St. Louis, Missouri-based firm, which currently yields 4.80% ($1.60), operates as a public utility holding company in Missouri and Illinois, the United States. The company, through its subsidiaries, engages in rate-regulated electric generation, transmission, and distribution businesses; rate-regulated natural gas transmission and distribution businesses; and merchant generation businesses.
In terms of AEE, there is one primary catalyst that potential income investors should find attractive and that is the company's operating margin when compared to some of its direct industry competitors. In the last 12 months, AEE has demonstrated an operating margin of 20.73%, whereas Center Point Energy, Inc. (NYSE:CNP) has only managed to demonstrate an operating margin of 16.65%. That's a difference of 24.50% over the last 12 months, which is pretty impressive if you ask me.
Hewlett-Packard Company (NYSE:HPQ), which closed trading on Friday at $17.29/share, will be going ex-dividend at the close of trading on Monday, September 10. The Palo Alto, California-based firm, which currently yields 3.00% ($0.53), provides products, technologies, software, solutions, and services to individual consumers and small- and medium-sized businesses (SMBs), as well as to the government, health and education sectors worldwide.
When it comes to HPQ, potential investors should consider the company's operating margin when compared to some of its industry competitors and how the company outpaces those competitors. In the last 12 months, HPQ has demonstrated an operating margin of 7.46%, whereas Dell Computer (NASDAQ:DELL) has only managed to demonstrate an operating margin of 6.38%. That's a difference of 16.92% over the last 12 months, which I happen to find pretty attractive.
Public Storage (NYSE:PSA), which closed trading on Friday at $145.72/share, will be going ex-dividend at the close of trading on Monday, September 10. The Glendale, California-based firm, which currently yields 3.00% ($0.53), operates as a real estate investment trust (REIT). It engages in the acquisition, development, ownership, and operation of self-storage facilities in the United States and Europe. The companys self-storage facilities offer storage spaces for lease on a month-to-month basis for personal and business use. Public Storage also has interests in commercial properties containing commercial and industrial rental space; facilities that lease storage containers; and ancillary operations, which include reinsurance of policies against losses to goods stored by its self-storage tenants, retail operations comprising merchandise sales and truck rental operations.
When it comes to PSA, there is one thing that potential investors should find attractive about the company and that is PSA's operating margin when compared to some of its direct industry competitors. In the last 12 months, PSA has demonstrated an operating margin of 48.18%%, whereas Cube Smart (NYSE:CUBE) has only managed to demonstrate an operating margin of 15.36%.
Potential investors looking to establish a position in AEE, HPQ or PSA should do so with a small to moderate position and add to that position as dividend announcements approach. Although the primary attraction comes in the form of dividend yield for all three companies, one of the more important secondary catalysts to consider are clearly each company's operating margin and how they outpace some of their direct competitors.
Disclosure: I am long HPQ, PSA. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.