Buying Ex DIvidend shares

Amarone

I am about to purchase some shares but on buying it stated "please be aware these shares are Ex Dividend"

I presume these means I will not be entitled to the imminent dividend payout of these shares but will however be entitled to future dividends?

I am purchasing these shares as I belive the company is a sound long term investment so I'm not too concerned at missing out on the latest dividend but thinking I should hold fire to see if theire is a price fluctuation?

PeacefulWaters

Amarone wrote: »

I am about to purchase some shares but on buying it stated "please be aware these shares are Ex Dividend"

I presume these means I will not be entitled to the imminent dividend payout of these shares but will however be entitled to future dividends?

I am purchasing these shares as I belive the company is a sound long term investment so I'm not too concerned at missing out on the latest dividend but thinking I should hold fire to see if theire is a price fluctuation?

You've more or less called it spot on.

Note that the share price probably fell the day they went ex-d.

bowlhead99

Amarone wrote: »

I am purchasing these shares as I belive the company is a sound long term investment so I'm not too concerned at missing out on the latest dividend but thinking I should hold fire to see if theire is a price fluctuation?

There is no reason to suggest there will be an imminent price change. Everything that everyone knows or predicts about the shares, good or bad, is already considered when making the average price today whatever the average price is today.

If you buy a share "ex-dividend" it means you're buying it without the right to the next cash dividend they pay. If you had been buying it a few days before it went ex dividend, you'd be buying it WITH the right to that dividend. But now you're buying it without, and the person who was on the share register before you has sold his shares to you without the right to the dividend, he will keep the dividend himself .

All things being equal, shares WITH the right to a dividend are more valuable than shares WITHOUT the right to a dividend. So price often drops at the same time it goes ex div, although you don't always see it because share prices move daily for all kinds of reasons.

You are right, they are only talking about the current div that's been declared and not paid. Your share still carries the right to vote in future meetings and get paid future dividends.

EdGasket

One advantage of buying ex-dividend is that the share price is usually lower than pre-dividend by the amount of the dividend, so you get the same number of shares at a lower price and pay less stamp duty on the total cost.

[Deleted User]

Hi,

the market took a hit yesterday, so price has likely dropped.