Dividend Question - Ex Div Dates

tintin_1929

Hi All,


I'm sorry if this is a stupid question but I've been reading everything I can to try and understand this!


Right, I understand that in order to qualify for the dividend, you must hold shares prior to the ex-div date. What I don't understand is why you wouldn't just buy a week or so before the ex-div date and qualify for the dividend?


I know I'm missing something hence the question.

ColdIron

You can but after the ex date the price will drop so you have effectively bought the dividend

MonroeM

ColdIron wrote: »

You can but after the ex date the price will drop so you have effectively bought the dividend

Is that always the case ColdIron? As an example, I'm pretty sure that Bankers share price has gone up slightly since the ex div date on 26 April.

ColdIron

Bankers goes up a lot, but it can be difficult to discern movements due to share price growth and distributions which can produce a net gain, don't forget Sterling has been dropping recently

MonroeM

ColdIron wrote: »

Bankers goes up a lot, but it can be difficult to discern movements due to share price growth and distributions which can produce a net gain, don't forget Sterling has been dropping recently

I was thinking of buying a small holding in Blackrock Smaller Companies but the share price is very high, in fact nearly at its peak but UK smaller companies in general are doing well at the moment hence the high buy prices.

le_loup

If, over time, share values increase, and they do, the price will, more often than not, be at a peak.

ArchBair

MonroeM wrote: »

I was thinking of buying a small holding in Blackrock Smaller Companies but the share price is very high, in fact nearly at its peak but UK smaller companies in general are doing well at the moment hence the high buy prices.

I hold Blackrock Smaller Companies and think it is one of the best IT's in its sector. It's done very well for me over the years and although the share price is at its peak if it's a long term holding you should be fine. They also have their ex div date on the 17th so if you do buy some shares, buy before then.

ColdIron

ArchBair wrote: »

They also have their ex div date on the 17th so if you do buy some shares, buy before then.

Why do you suggest that? In what way would you benefit?

Sally57

ColdIron wrote: »

You can but after the ex date the price will drop so you have effectively bought the dividend

You are right about this most of the time but there are always instances where an IT's share price can increase in value after the ex div date.

ArchBair

ColdIron wrote: »

Why do you suggest that? In what way would you benefit?

Well if MonroeM did decide to buy some shares she may as well do it before the ex div date to gain some more shares through dividend reinvestment. Or is that not right?

k12479

Sally57 wrote: »

...there are always instances where an IT's share price can increase in value after the ex div date.

But is such an increase attributable to the dividend in any way?