Dividend, Share Price: Is there a connection?

[It's Snake Pliskin]

Re: Dividend, Share Price. Is there a connection?

Rozella,

Do you plan to trade TIM? It's up today and goes ex div on 10th August, payable 31st Aug? I have a holding and am waiting for the dividend before offloading.

As soon as a stock goes ex dividend, all existing holders are entitled to receive the dividend. Does this eligibility mean after the 10th or on the 10th?

Thanks in advance.

Snake Pliskin

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

G'day Snake Pliskin,

Do you plan to trade TIM? It's up today and goes ex div on 10th August, payable 31st Aug? I have a holding and am waiting for the dividend before offloading.

The dividend amount plus franking credits, divided by my investment, does not meet my criteria when I use marginlending.....I require 10% or better, TIM only shows 4.74%, so I will not be purchasing.

As soon as a stock goes ex dividend, all existing holders are entitled to receive the dividend. Does this eligibility mean after the 10th or on the 10th?

Exdiv day is on the 10th August, so you can sell on the open, & still be entitled to the dividend.

rozella

 

[It's Snake Pliskin]

Re: Dividend, Share Price. Is there a connection?

Rozella,

Thanks for that.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Bought another parcel of WAN today (final qty on the close) @ average of 839.5 with a margin of 70% Investment 251.85/share.
Profit announcement expected 5th August, exdiv date expected 12th September.
Last years dividend was 21.0/share fully franked 9.0/share.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Bought WDC today on the pre-open for the distribution announcement @ 1795.0 with a margin of 75%. Investment 448.75/.share.
Exdist 9th August, distribution 51.0/share, franking TBA.

I am having problems emailing Optus ISP users today re exdividendwatchlist intraday profit reports......most are being rejected......no problems with other ISP's.

 

[JeffB]

Re: Dividend, Share Price. Is there a connection?

Hi Rosella,

I am interested in hearing your view on BHP. I understand that BHP will announce a record FY profit on 24th August. There are a few indicators which spell a big play for your strategy (isn't it reffered to as dividend stripping ???).

Firstly, the meteoric rise of RIO (as a comparable business) pre and intraday of their announcement,

Secondly, and more importantly the ongoing strength in commodities,

Thirdly, BHP's margin ratio of 75%,

Fourthly, the possibility of a special dividend.

Given point number two I think BHP's share price will recover farely quickly, post ex div.

Thanks for a very interesting thread........JeffB

 

[Warren Buffet II]

Re: Dividend, Share Price. Is there a connection?

Hi Rosella,

I am interested in hearing your view on BHP. I understand that BHP will announce a record FY profit on 24th August. There are a few indicators which spell a big play for your strategy (isn't it reffered to as dividend stripping ???).

Firstly, the meteoric rise of RIO (as a comparable business) pre and intraday of their announcement,

Secondly, and more importantly the ongoing strength in commodities,

Thirdly, BHP's margin ratio of 75%,

Fourthly, the possibility of a special dividend.

Given point number two I think BHP's share price will recover farely quickly, post ex div.

Thanks for a very interesting thread........JeffB

Yes, I think that is likely but they paid last February 17.1522 c, so if they keep the same divd the yield will be 0.875%. It is a poor yield for the effort.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

G'day JeffB & Warren Buffet II,

I have to agree with WBII, as the yield for a dividend trade is far too low, that does not mean that it is not a good rising stock, it just does not fit the criteria for me to warrant a dividend trade, as I am after stocks that fit the mould so that I can have a consistant cashflow.

As of closing 5th August BHP was 1960.0 To buy now with a 75% margin, our investment would be 490.0/share.
As they have not reported yet, I like to use the dividend for the same period last year to give me some sort of indication on yields, which was 13.23/share.

My criteria just to qualify to go on my daily prospect watchlist is that the (dividend + franking credit) divided by the investment, must be 10% or greater. So in the case of BHP, it would be (13.23 + 5.67) / 490.0 = 0.03857 or 3.86%

They should announce approx 24th of this month, but the dividend (including any special dividend) would need to be approx 35.0/share ie 50.0/share including franking credits to come onto my radar.

As I said earlier, this does not mean that BHP is not a buy, it just means that in my opinion for my own trading, the lure of the dividend is not great enough to drive the price. The rising price is not because the dividend is coming, it is from other reasons which does not fit my strategy.

Cheers

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Sold DJW today @ 395.0
Bought 13th July @ 386.0 with a margin of 70%
Investment 115.8/share
Exdiv date today, 8th August.
Dividend is 12.5/share fully franked 5.36/share
Gross profit 21.5/share = 18.56% return on investment (franking excluded)
26 day trade

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Bought another parcel of WDC today @ 1790.0 with a margin of 75%
Investment 1147.5/share
Goes exdist tomorrow 9th August, distribution 51.0/share, franking TBA

 

[JeffB]

Re: Dividend, Share Price. Is there a connection?

Hi Rozella,

CBA would have met your criteria. It has been moving upwards very strongly pre FY announcement (tomorrow). Are you long CBA ?

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Yes JeffB,

This time around I bought on 6th July @ 3793.0, then sold 27th July @ 3916.0, then re-entered @ 3906.0 on 1st August & still holding.

I have had mixed success with CBA over the years, sometimes after exdiv it struggles......but whose to know this time.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Sold WES today @ 4118.0
Bought 6th July @ 4008.0 with a margin of 70%
Investment 1202.4/share
Profit announcement today, exdiv date 15th August.
Dividend 127.0/share fully franked.
Gross profit = 110.0/share = 9.15% return on investment. 34 days

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Re-entered WES today @ 4070.0 with a margin of 70% Investment 1221.0/share
Exdiv date 15th August, dividend 127.0/share fully franked.

Sold ANZ today @ 2182.0 to finance another parcel of CBA
Bought 9th May @ 2170.0 with a margin of 75% Investment 542.50/share
exdiv date 16th May. Dividend 51.0/share fully franked 21.85/share.
Gross profit 84.85/share = 15.64% return on investment. 92 day trade

Bought another parcel of CBA today @ 3872.0 with a margin of 75%
Investment 968.0/share
Profit report announced today, exdiv 15th August, dividend 112.0/share fully franked.

 

[Warren Buffet II]

Re: Dividend, Share Price. Is there a connection?

Bought another parcel of CBA today @ 3872.0 with a margin of 75%
Investment 968.0/share
Profit report announced today, exdiv 15th August, dividend 112.0/share fully franked.

Hi Rozella,

How interesting CBA today? They announced the best results everand the price went down 2%, have you experienced a similar situation before?

I think the share price already acummulated the divd, so what you reckon is going to happens in the next days before XD and in the XD day?

I bought more CBA today.

WBII

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

G'day Warren Buffet II,

From news.com

"The cash profit was slightly less than expectations and perhaps the dividend was slightly less than some of the bullish forecasts," he said. "But the stock had run up pretty high in anticipation of a good result."

Shares crack records, CBA drops

As I said in a post earlier, I have had mixed results with CBA in the past, ......it dropped just over a dollar today in half a day, it can easily go up again in the next 2 days......who knows ??

I will make my decision Friday after lunch whether to stay for the div or not.

 

[DTM]

Re: Dividend, Share Price. Is there a connection?

We could be seeing a run down before buying for the div will lift the price again.

Rozella, when is the dividend being paid?

Thanks in advance.

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

CBA
exdiv date 15th August 2005
pay date 23rd September 2005
dividend 112.0/share fully franked

 

[rozella]

Re: Dividend, Share Price. Is there a connection?

Sold WES today for a smaller gain @ 4132.0
Bought earlier today @ 4070.0 with a margin of 70% Investment 1221.0/share
Exdiv date 15th August, dividend 127.0/share fully franked.
Gross profit = 62.0/share = 5.08% return on investment. 1 day trade

Not much time for a re-enter now unless I get lucky, especially when I have golf until midday tomorrow. I may have to leave some instructions on this one.

 

[doctorj]

Re: Dividend, Share Price. Is there a connection?

Thanks for taking the time to post these. They make very interesting reading!