![]() ![]() But you can ignore all this and just focus on the ex date to know if you're going to get the dividend or not. be a shareholder of record) on the record date. So you have to buy the stock before the ex date in order to have the transaction settle (i.e. It is normally 2 days after the ex-dividend date because it takes a couple of days for share transactions to settle. The record date is the date by which you need to be a shareholder of record in order to receive the dividend. It only matters because a dividend isn't official until it is declared by the company's Board of Directors. This is just an informational date and can vary from days to weeks prior to the ex-dividend date. The declaration date is the date the company declares the dividend (approves and announces it). As long as you own the stock by the end of day on the day before the ex date then you will get paid the dividend (although you won't receive the money until the payable date). Although important, all you need to focus on is the ex-div date. Other Dividend Dates (Which You Can Ignore)Īlthough the ex-dividend date is the only date that matters to most investors, there are 3 other dates that relate to dividends: declaration date, record date, and payable date. ![]() You may make or lose a little on the stock, but you will get the dividend for sure. ![]() If you want to hold the stock for as little time as possible and still get the dividend, you can buy the stock just before the market closes the day before the ex-div date and then sell the stock just after the market opens on the ex-dividend date. Likewise, if you buy the stock on the ex-div date you will NOT receive the dividend. If you sell your stock before the ex-div date then you will NOT receive the dividend. In order to receive the dividend you must own the stock by the close of market on the day before the ex-dividend date.įor example, if a stock has an ex-div date of March 5, you must own the stock by close of market on March 4 in order to receive the dividend. Ex-Dividend DateĪ stock's Ex-Dividend Date (also known as ex-div date or ex date) is the first day the stock trades without the dividend. Before we talk about that, let's review when you need to own a stock in order to receive its dividend. If all you wanted was a 3.6% per year income stream, you could just buy a portfolio of stocks that had an average dividend yield of 3.6% per year or more (such as those above).īut if you want even more income, then you can layer on a covered call strategy on top of dividend paying stocks. For example, here are ten S&P 500 stocks that currently have a dividend yield of 3.6% or more: Some stocks pay nearly double the average dividend yield. Many S&P 500 companies pay quite a bit more than that. Historically, the S&P 500 average dividend yield has been higher, typically above 3% for the 100 years prior to Black Monday in 1987: Of course, that 1.94% is an average. Relatively low but not surprising given an 8 year bull market that has increased stock prices, as well as the current low interest rate environment (which means that companies don't need to pay high dividends to attract investors). Current Dividend YieldĪs of today, Feb 27, the S&P 500 average yield is 1.94%. ![]() These companies are reinvesting their profits for new growth initiatives rather than return it to shareholders. There are some notable (large) companies among the 80 that do not pay dividends: Amazon, Facebook, and Google, for example. In fact, 84% of the S&P 500 companies (420 of the 500 companies) pay dividends. We'll also show a brief video on how to use software to quickly find good dividend stocks to write covered calls on. This article shows how to generate two income streams (dividends and option premium) from a single asset (shares of stock). "The only thing better than an asset that produces an income stream is an asset that produces TWO income streams." ![]()
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