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Question about dividend stocks
Posted on 11/14/22 at 10:25 am
Posted on 11/14/22 at 10:25 am
There is a possibility this is a dumb question . I don’t claim to be an expert
I notice that Exxon pays out its dividend today .
What is to stop someone from buying a stock that pays a high dividend the day before it pays out then after it pays out sell the stock and keep the dividend then the next day find another stock that’s about to pay a dividend then just keep doing this over and over again ?
I notice that Exxon pays out its dividend today .
What is to stop someone from buying a stock that pays a high dividend the day before it pays out then after it pays out sell the stock and keep the dividend then the next day find another stock that’s about to pay a dividend then just keep doing this over and over again ?
4
Posted on 11/14/22 at 10:41 am to Baylor
The stock is reduced by the amount of dividend paid, so it’s a zero sum game.
Posted on 11/14/22 at 10:43 am to Baylor
The dividend goes to the person who held the share on the Ex-Dividend date, not the dividend paid date.
All else being equal the price drops by the dividend amount on the Ex date, because you now have to wait 3 months to get the dividend.
Also, if you sell the next day and wait three months, you risk the price going up before you buy again. In which case you would have been better off holding at the lower price.
All else being equal the price drops by the dividend amount on the Ex date, because you now have to wait 3 months to get the dividend.
Also, if you sell the next day and wait three months, you risk the price going up before you buy again. In which case you would have been better off holding at the lower price.
Posted on 11/14/22 at 11:09 am to Bestbank Tiger
Thanks everyone
Had a feeling it was something like that .
Had a feeling it was something like that .
Posted on 11/14/22 at 12:21 pm to Baylor
Also Exxon doesn’t pay out a dividend until December.
Ex-dividend date is today. So today determines who receives the dividend but it’s not paid out for another month.
Ex-dividend date is today. So today determines who receives the dividend but it’s not paid out for another month.
Posted on 11/14/22 at 3:25 pm to Baylor
Baylor, this should help. Essentially, the key date is owning the stock BEFORE the Ex-dividend Date, which is usually one month or more before the actual dividend Pay Date.
When a company declares a dividend, it sets a record date when you must be on the company's books as a shareholder to receive the dividend. Companies also use this date to determine who is sent proxy statements, financial reports, and other information.
Once the company sets the record date, the ex-dividend date is set based on stock exchange rules. The ex-dividend date for stocks is usually set one business day before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.
When a company declares a dividend, it sets a record date when you must be on the company's books as a shareholder to receive the dividend. Companies also use this date to determine who is sent proxy statements, financial reports, and other information.
Once the company sets the record date, the ex-dividend date is set based on stock exchange rules. The ex-dividend date for stocks is usually set one business day before the record date. If you purchase a stock on its ex-dividend date or after, you will not receive the next dividend payment. Instead, the seller gets the dividend. If you purchase before the ex-dividend date, you get the dividend.
Posted on 11/14/22 at 4:10 pm to skewbs
Great info .
Thanks .
So if I owned XOM today I could sell it tomorrow and still get the dividend a month from now even though I don’t own it anymore since today was the EX-dividend day?
Thanks .
So if I owned XOM today I could sell it tomorrow and still get the dividend a month from now even though I don’t own it anymore since today was the EX-dividend day?
Posted on 11/15/22 at 6:29 am to Baylor
quote:
So if I owned XOM today I could sell it tomorrow and still get the dividend a month from now even though I don’t own it anymore since today was the EX-dividend day?
No
Posted on 11/15/22 at 7:47 am to Grinder
Yes
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