Understanding stock dividends

nickohorny

Hello, newbie questions regarding dividends.

I have read that in order to receive a stocks dividends you need to have shares with them by the record date. I am still unclear on this, surely you need to hold the stock for a whole year to gain its dividends? I mean lets say NEXT PLC announced their dividends record date for April 1st, and I purchase shares before then like on March 25th - I am entitled to dividends?
I am confused I think.

Also - I look on google finance and cannot see where it shows the record date for a stock, If you were to take NEXT, here:

(I cannot post links) but -

google.com/finance?q=LON%3ANXT&ei=KUHfUriZKdHPkAXllAE

I can see DIV/YIELD but where shows the last dividend payment date or if the next one has been announced?

Sorry for basic questions.
But thanks for the help

k12479

nickohorny wrote: »

surely you need to hold the stock for a whole year to gain its dividends?

No, just by the record date.

nickohorny wrote: »

I mean lets say NEXT PLC announced their dividends record date for April 1st, and I purchase shares before then like on March 25th - I am entitled to dividends?

Yes.

nickohorny wrote: »

Also - I look on google finance and cannot see where it shows the record date for a stock, If you were to take NEXT...

I don't see it on google, but other places like Morningstar will show it, although the most up to date sources are normally the company's websites, e.g Next here - http://www.nextplc.co.uk/news-and-events/financial-calendar.aspx

[Deleted User]

Hi,

have a look here for an explanation.

nickohorny

Thanks for the response, I see..

So am i correct in saying that people can create investment plans purely around dividend gains? they buy for dividend payments then withdraw to re-invest the gains in other stocks due to pay dividends?

I have only ever thought of stocks as increasing profit from cap gains, as in going higher for profit.

Still learning... sigh.. :money:

[Deleted User]

Hi,

usually the share price drops by the amount of the dividend, so no quick kill.

Edit: Look.

ChesterDog

I bet that, at some time early in their 'career', most of us investors think we might have spotted something that the investing world in general seems to have overlooked.

The 'Buy to catch the dividend and then sell' is one such idea.

Even if it worked - which, as others have shown, it doesn't - by the time you factor in your dealing charges...

nickohorny

ChesterDog wrote: »

I bet that, at some time early in their 'career', most of us investors think we might have spotted something that the investing world in general seems to have overlooked.

The 'Buy to catch the dividend and then sell' is one such idea.

Even if it worked - which, as others have shown, it doesn't - by the time you factor in your dealing charges...

haha yeah I am guilty for them "what if" moments! but I know the ideas I think of as I learn are too good to be true!

Trying to learn more and more...

Thanks everyone!

gadgetmind

There are some who use dividend "skimming" to their advantage. Some work on the theory that prices don't drop by as much as the dividend, others are wanting a capital loss and are happy for this to be turned into dividend income.