Question about Stock Dividends?

lets say the company stock has been beaten down, and the lower it goes the dividend yield goes higher because they haven't decide to cut dividend rate.

my question is.. why don't I just buy those stock and hold it for couple days and make tons of money from dividend side?

i may lose money in stock value itself but won't the dividend rate makes up for it?

lets just say the dividend yeild become 6%-12% and i may lose my stock value just 3% in 5 days

how long do I have to hold the stocks in order to receive the full dividend pay

Dumb question for you

You buy the stock, and get a big yielding dividend, thats payable in a few day, BUT the stock drops in value So you receive high yield on dividend, but loose on your invested capital, where did you make money.

Your capital lose will be a smaller percentage, but a larger dollar amount loss, you dividend income will be a large percentage profit but the dollar amount of the profit is small

DATES - the company announces a dividend = Date Declared
The company will say that it will pay all shareholders as of a certain date = RECORD DATE
And the dividend will be paid on a certain date = PAYABLE DATE
But you must own the stock, (settled in your account) on a certain date = X-DATE
If you buy before the X-date, you get the dividend, you buy on or after the X-Date you don't get the dividend

Go back to the drawing board



Ron Berue's response is not correct

Dividends are typically paid quarterly (but sometimes monthly), so the percent you get for one dividend is usually not the entire annual percentage. Also the stock usually drops by the amount of the dividend when it opens on ex-div date, so unless their is something to drive up the stock price, buying a stock for one dividend may be a no gain situation.

In a taxable account you also have to consider tax. If you own the stock for a 61 day period of the 120 day window of ex-div date, a "qualified" dividend would be considered long term gain. If owned for a shorter time it would be a short term gain (higher tax), if there was a gain after trade fees.

So buying a stock for a short period just for the dividend is not a sure thing.

Its my understanding you have to be in the trade BEFORE the dividend is announced. AND you have to still have the stock on the day the dividend is paid.

Thanks for asking your Q! I enjoyed answering it!

VTY,
Ron Berue
Yes, that is my real last name!

All I can say is, "It's your money, so you can choose to lose it anyway you want to!".


Besides, you forgot about commiision on the sales1

Divident stocks are always a good way to go. The banks having dropped their rates on cd`s, money markets I rather go for canadian oil trusts as HTE, ERF, PWE. These pay by the month. I have owned them for 2 years and wow what returns. Pwe is paying 33.5 cents a share a month. I have 2000 shares so I get 670 dollars this month just for this one. Check the symbols out. Some say a chance well I love this one and I am making big divident payouts.....