Eight Stocks Going Ex-Dividend in October 18 comments
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During a bull stock market, some investors use a 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 approximately the same price, yet being entitled to the dividend. Please note: this usually only works in bull markets.
If you are interested in buying dividends, there are several stocks in several different sectors and industries to choose from. Remember that, 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 month.
All of the following stocks have market caps over $500 million, and yields over 3%:
- Harvest Energy Trust (HTE) Ex-div date: 10/20/2008 Yield: 19.6%
- British Sky Broadcasting Group plc (BSY) Ex-div date: 10/22/2008 Yield: 3.6%
- Royal Bank of Canada (RY) Ex-div date: 10/23/2008 Yield: 3.9% P/E: 14 PEG: 1.72
- Bank of Montreal (BMO) Ex-div date: 10/29/2008 Yield: 5.8% P/E: 13 PEG: 1.65
- ConAgra Foods, Inc. (CAG) Ex-div date: 10/29/2008 Yield: 3.9% P/E: 19 PEG: 2.14
- NiSource Inc. (NI) Ex-div date: 10/29/2008 Yield: 6.1% P/E: 15 PEG: 4.88
- PNM Resources, Inc. (PNM) Ex-div date: 10/29/2008 Yield: 4.4%
- Zenith National Insurance Corp. (ZNT) Ex-div date: 10/29/2008 Yield: 5.2% P/E: 8 PEG: 1.66
Disclosure: Author does not own any of the above.
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This article has 18 comments:
trying for anything less than a combination of taxes and inflation seems to be an act of futility. IMO.
So what gives?
Not concerned about the short term volatility.
Do you own HTE?
What's ur opinion on the dividend and the solidity of it's financials long-term?
Not concerned about the short term volatility.
Do you own HTE?
What's ur opinion on the dividend and the solidity of it's financials long-term?
On Oct 06 10:33 AM b3rkut wrote:
> I'm a bit confused: HTE's website says the dividend is only $0.30,
> so that works out to a whole lot less than a 19% yield as stated
> in this article (and also on the stock charts on Seekingalpha and
> Yahoo finance)!
>
> So what gives?
What's ur opinion on the long-term dividend stability and the solidity of it's financials long-term?
First, all of the Canadian Royalty trusts are scheduled to convert to Corporate Status in 2011, so this monthly payout may stop then, I say may because there are a lot of Canadians relying on that income and Elections will decide whether the Ruling party retains control...the Party that said they wouldn't do what they did as so as they came to power. "Read my Lips".
Currently, they are trading as if the Sun won't rise tommorow. I own them, won't sell them regardless.
Two years down the road if they aren't CanRoys, they will be oil companies with great earnings and tremendous assets. For now you get paid for waiting. And if they slash their current dividend in half, it will still beat inflation+US taxes.
I am not buying more because I see tremendous value elsewhere, which I do not want to pass up.
I see you think there is tremendous value elsewhere from your post. I'm curious...with the current market conditions, where do you see better value. I think the value of the CanRoys are pretty good. Maybe I'm just not looking in the right areas?
Thanks for your advice.
On Oct 08 09:51 AM paultaut wrote:
> What's with the double posting?
>
> First, all of the Canadian Royalty trusts are scheduled to convert
> to Corporate Status in 2011, so this monthly payout may stop then,
> I say may because there are a lot of Canadians relying on that income
> and Elections will decide whether the Ruling party retains control...the
> Party that said they wouldn't do what they did as so as they came
> to power. "Read my Lips".
>
> Currently, they are trading as if the Sun won't rise tommorow. I
> own them, won't sell them regardless.
>
> Two years down the road if they aren't CanRoys, they will be oil
> companies with great earnings and tremendous assets. For now you
> get paid for waiting. And if they slash their current dividend in
> half, it will still beat inflation+US taxes.
>
> I am not buying more because I see tremendous value elsewhere, which
> I do not want to pass up.
Its fleet is less than 10 years old. Since Oil discoveries and locations are further away than ever before, the amount of travelling time has increased to the point where more ships are needed to deliver the same amount of oil. TNK may experience a slowdown and may be forced to cut its dividend but if the dividend is cut by 2/3rds over the next 1 to 2 years you will still get a 10% yield and it isn't Canadian.
SBLK is almost in the same yield area, but it deals with dry goods. These guys have long term contracts. I'm hoping it drops below 5, its another Trust whose payout is $1.40 annualized, Current contracts in place have full usage for 2008, 90% for 2009 and 69% for 2010. Long enough for me to recover my full purchase cost if none of them are cancelled early, they do have early cancellation built in to their contracts.
I use the worst case scenario, all contracts which can be cancelled early, are. In this scenario, I envision a 2/3rds reduction in the Dividend. I would still expect 10%. This is not Canadian.
Neither of these companies pays more than 2/3rds of their earnings. Again, because they are young fleets I anticipate another 20 or more years of Usage out of each. This crisis won't last forever, so with a tremendous while you wait dividend, I look for at least a double in price over the next 3-5 years.
I want to be able to have a replacement dividend in place.
I am also watching a Australian Bond Fund (FAX, monthly Payout) and a thinly traded can't name it Water Trust, the firat of its kind.
FAX, I owned years ago but abandoned for the CanRoys. It has CDS exposure but not a lot. Current yield is 10%, If it gets beaten down to say $3 and change, I'll be back in.
On Oct 07 07:18 AM b3rkut wrote:
> thanx murphy, i didnt realize it was .30 per *month*.
>
> What's ur opinion on the long-term dividend stability and the solidity
> of it's financials long-term?
Fire away, what am I missing at these prices? Even with a huge div cut, I do well.
On Oct 10 10:44 PM S.Murphy wrote:
> Have been trying to find something wrong with HTE but have not found
> anything to warrant the ridiculous sell-off (of all the CANROYs).
> From what I can gather, it is primarily forced selling from hedge
> funds and mutual funds and has less to do with the future price of
> oil or fundamentals. Trading at 1/2 book, hedged far enough out to
> keep dividend, very steady payout with a good plan to address the
> 2011 transition. Just bought more at $7.30. I just keep thinking:
> "If it's too good to be true..." Even if oil really tanks and dividend
> is halved, it's still a great yield. Upside share price potential
> from these levels must be better than down in the long run.
I also picked up some of the beaten down dry bulk and tanker names --- OCNF, PRGN, SBLK, and FRO. China and India are going to come back to the market, sooner than later. These are spec stocks, but man do they pay high dividends. The Baltic Index has been slaughtered and the stocks have followed. If China comes back, the Index should rise and take these stocks with them. The credit crunch should also be a positive factor here --- many of the ships that were going to be built or purchased were delayed or canceled. That means higher or stable charter rates if the Index rises and a potential for M&A in the space at these prices.
I'm either very wrong or I'm going to be very happy with this basket.