How long do you need to have shares to qualify for a dividend?

MattLG

I imagine this is something that is set by the individual companies themselves, so I'm just looking for a ball park figure. Or am I completely wrong and you can just buy them the day before the dividend payout?

MattLG

greenwich

Companies decide when to pay dividends, if at all. Most British companies pay twice a year, most US ones 4 times a year. A few weeks before the dividend payment date there is an important date called the ex-dividend date. If you buy a share after the ex-dividend date then you don't get the next dividend; it goes to the person who sold you the shares, even though they no longer own the shares on the payment date.

Edit: I forgot to add that the share price takes account of the ex-dividend date. So, if the stockmarket stood still, the share price would fall on the ex-dividend date by the amount of the dividend. In practice this is hard to notice as there's so much else going on in the markets.

MattLG

Thanks very much, that's very useful. Is there an easy way of finding out what the ex-dividend dates have been for a company in the past. I can't find anything like that on the websites I'm using, https://www.iii.co.uk and https://www.digitallook.com.

Cheers,

MattLG

greenwich

Sorry, I don't know who keeps those records. I guess the dates of the dividend payments would be known to the company and/or their share registrars and they would know approx. how much time there is usually between the ex-dividend date and the payment date, so you could estimate. Newspapers usually mark the share price (with an asterisk or some other symbol) to indicate which shares are ex-dividend at any time.

MattLG

Thanks again, very helpful.

MattLG

cheerfulcat

Hi, Matt,

You might find this useful

http://www.stockchallenge.co.uk/typo/stockchallenge/site/index.htm

Click on " dividend dates "

There's a dividends FAQ as well

http://www.stockchallenge.co.uk/typo/stockchallenge/site/faq.htm


HTH

Cheerfulcat

greenwich

I am guessing your idea is to buy high-yielding shares the day before the ex-dividend date, sell them a day later and collect the juicy dividend. I've read that some high income fund managers do just this, to make sure they have enough income to pay out to their investors. Bear in mind though that you'd pay stamp duty (0.5%), the buying/selling spread from the marketmaker (1% upwards), and broker's commission on both purchase and sale (maybe another 1%). The last two of those things can be negotiated down by a professional fund manager but less so by you and me.