Banuelos

By Gerardo Banuelos

An ex-dividend date is a critical date in the dividend process that determines whether a shareholder will receive a dividend payment. To understand dividend dates, it’s essential to know the following key dates: (1) record date; (2) ex-dividend date; and (3) declaration date.

Record Date: The date the company determines who is a shareholder of record, eligible to receive the dividend.

Ex-Dividend Date: The day before the record date, when the stock price typically declines by the amount of the dividend.

Declaration Date: The day the company announces the dividend payment and the important dates related to it.

How do ex-dividend dates work? When a company declares a dividend, it sets a record date, which is usually one business day after the ex-dividend date. To receive a dividend, you must own the stock before the ex-dividend date. If you buy the stock on or after the ex-dividend date, you will not receive the next dividend payment.

What are the consequences of buying on or after the ex-dividend date? You will not receive the next dividend payment. The stock price may decline by the amount of the dividend on the ex-dividend date. You will not be considered a shareholder of record and will not receive any subsequent dividend payments.

Why does the ex-dividend dates matter? Ex-dividend dates are crucial for investors who want to receive dividend payments. They help investors plan their investment strategies and make informed decisions. Understanding ex-dividend dates can help investors avoid potential losses and maximize their returns.

The ex-dividend date is the day before the record date, when the stock price typically declines by the amount of the dividend. To receive a dividend, you must own the stock before the ex-dividend date. Buying on or after the ex-dividend date means you will not receive the next dividend payment. Understanding ex-dividend dates is essential for investors who want to maximize their returns and minimize losses.[1]

[1] Charles Schwab. (2023) Ex-Dividend Dates: Understanding Dividend Risk.; U.S. Securities and Exchange Commission. (2024) Ex-Dividend Dates: When Are You Entitled to Stock and Cash Dividends. Investor.gov.