“Where can I find a company’s ex-dividend date? and pay date? Thanks.” — John Jessica

Check out www.stocksmart.com, which provides information about ALL upcoming dividends, splits, and distributions sorted by ex-dividend date or company for up to the next three months. Actually — check out this site anyway. It’s one of the best free sources of information I’ve seen.

And for those we’ve made curious: the ex-dividend date is the date on which buyers will no longer get the dividend that’s been declared. So it trades “ex-cluding” the dividend. The actual dividends themselves may not be mailed out for weeks — on the pay date (and you’ll still get yours even if you sold out in the meantime).

Usually it’s not very dramatic, in part because large dividends have gone out of fashion. If a company finds itself with an extra billion or two, it will not generally pay it out as a special dividend. It will generally use it to launch a disastrous acquisition campaign. Or it will build a luxurious new headquarters. Or, mostly these days, it will buy back shares of its own stock. That’s a better strategy than the first two, because it makes each remaining shareholder’s piece of the pie a little more valuable (the slices are slightly larger because the pie is divided into fewer of them) without having that extra value taxed (until you sell and take your profit).

But let’s say we’re the Ford board and we decide at our meeting June 15 to pay our regular 38-cent quarterly dividend plus “a special dividend” of an additional $1 a share. We decide it will be paid on August 15 to “shareholders of record” as of July 18. That means anyone buying the stock far enough in advance for the transaction to settle by July 18 (normally three business days in advance — which in this case would be July 15) will get the dividend. But anyone buying it too late for it to settle by July 18 won’t.

That’s why there will be a little “x” in the stock pages for a few days, to warn newspaper readers that the stock is trading “ex-dividend.” If you buy it “ex-dividend,” the trade will not settle in time for you to get this quarter’s dividend. The train has left the station.

Other things being equal, if Ford stock closed at 50 on July 15, it would open at 48-5/8 the next morning, because $1.38 in dividends has just been carved out of what you’re buying. If a share of Ford was worth $50 to you yesterday, then it should be worth $50 less the $1.38 dividend you’re not going to get if you buy today. Recognizing this, if Ford should close trading July 16 at the same $50 it did July 15, the computers and stock pages will not show it “unchanged,” as you might expect, but actually “up” $1-3/8 for the day.

But all of this is so out of fashion. Dividends? Who would want dividends? Isn’t it better just to buy stocks that go up 30% a year?

 

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