Dividend Question - Ex Div Dates
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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?
Not really - as others have pointed out, the price of a share usually drops immediately after the ex-dividend date, so for a fixed amount of money you either buy them at the higher price and get less shares initially but then a dividend (in cash or extra shares), or buy after the ex-dividend date when you should be able to get more shares for your money.0 -
Well as I say in post #2 you are paying a higher price per share so get fewer shares for your pound but will get the dividend (which you can reinvest). If you buy ex div you have no right to that dividend but can buy the shares at a price that no longer includes the dividend but have no dividend to reinvest. Six of one and half a dozen of the otherWell 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?0 -
Indeed, as I alluded to in post #4. However it can be difficult to see the effect of distributions in isolation amongst other competing factors, sentiment, currency etc especially with lower yields. It's easier to see it with OEICs as you can directly compare Acc and Inc funds where these other factors are neutralisedYou 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.0 -
There is so much misunderstanding about dividends and share price.
If all things are equal - and they rarely are - a company's value on ex-div date is reduced by the amount of the dividend. It has declared a liability to the shareholders that was not there the day before. Therefor the balance sheet - the book worth of the company has less value than it did.
It is pretty pointless to buy just before the ex-div date even if you are taking the income, you are effectively just getting your own money back. If you have invested for growth and you reinvest that dividend you are paying twice; once for the original purchase and again to reinvest the dividend.0 -
Well as I say in post #2 you are paying a higher price per share so get fewer shares for your pound but will get the dividend (which you can reinvest). If you buy ex div you have no right to that dividend but can buy the shares at a price that no longer includes the dividend but have no dividend to reinvest. Six of one and half a dozen of the other
So in general terms if you buy ex div you usually can buy at a lower price - is there an optimum time to buy for instance is it on the actual ex div date or monitor the share price up to a week after the ex div date?0 -
Not really. I suppose for funds you might avoid buying just before they go ex div so that you don't get most of the dividend returned as an equalisation payment that you have to do something with0
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Not really. I suppose for funds you might avoid buying just before they go ex div so that you don't get most of the dividend returned as an equalisation payment that you have to do something with
Thank you, so there is no real timing per se with shares/IT's as you said before its six of one and half a dozen of the other.0 -
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 bought into Blackrock Smaller Companies (BRSC) on the 3 May at a price of 1423.00. Therefore, it will be interesting to see what the share price will be after the ex div date - lower or higher?
As mentioned by other posters, it is usually lower but apart from general market dips BRSC seems to be only heading in one direction at the moment but as we all know that can easily change.0 -
I bought into Blackrock Smaller Companies (BRSC) on the 3 May at a price of 1423.00. Therefore, it will be interesting to see what the share price will be after the ex div date - lower or higher?
As mentioned by other posters, it is usually lower but apart from general market dips BRSC seems to be only heading in one direction at the moment but as we all know that can easily change.
So, as above I bought £10K of shares in BRSC on 3 May for 1423.00 prior to the ex div date and today on the ex div date it closed at 1485.00.
So on this occasion if MonroeM waited for the share price to drop on ex div date then she would have had to pay more for the shares and not receive the 16.00p dividend.0 -
So, as above I bought £10K of shares in BRSC on 3 May for 1423.00 prior to the ex div date and today on the ex div date it closed at 1485.00.
So on this occasion if MonroeM waited for the share price to drop on ex div date then she would have had to pay more for the shares and not receive the 16.00p dividend.
BRSC is itself invested in various quoted companies therefore it's NAV will constantly fluctuate along with it the price that buyers/sellers will trade the stock at.0
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