Don’t Be Late For The Ex-dividend Date
You may hear the terms ex-dividend, ex dividend, or ex dividend date tossed around here a little bit, but if you don’t know what it means, then you may want to buckle in. Ex-dividend dates are important, especially if you are attempting to rock your dividend boat, because they tell you if you’re getting paid this quarter or not.
That’s the short definition. Ex-dividends are the date by which you must purchase a security in order to be listed as a shareholder, and thus receive a dividend.
Why is this date important? It means you get paid! If you miss the ex-dividend date, then you’re going to buy a security and sit on it for a whole quarter before you get any dividends! We don’t want that! Now you know what an ex-dividend date is, and generally why it is important, but how do you find the date and how do you use it?
Locate The Date
Finding the date is, generally, pretty easy. You can go to Dividend.com and search for the company. If the company has announced the ex-dividend date, then it will probably be on there; that is the first place we look. If you don’t see the date on there then you can go to the company’s investor site and see if they have announced it. If you absolutely cannot find it, then they may not have announced it in which case you can ball park the date by looking at the last few years. If you look at the same quarter over the last few years, then you should be able to get an OK idea of when it might be.
Warning: Like anything else, looking at the past does not guarantee the future. If you must estimate the ex-dividend date, take it with a grain of salt. Even if it happened on the same day the last 3 years, things can change, and dates can be delayed. Take the estimation for what it is, an educated guess, and don’t invest based on your estimations.
Use The Date Properly
Now you know what the date is, why it is important, and how to find it, but how do you use it to your advantage? To use the date to your advantage we suggest reading our article about rocking the dividend boat, but we will also go over it a bit here. First, in order to properly use this date, you need to know when it is actually good for. You MUST purchase your stock by the day before the ex-dividend date! We have heard some people make the claim that they bought on the ex-dividend date, but it is general policy that you buy before this date. If you buy the day of then you risk not being considered a shareholder of record, which is a fancier way of saying you’re not getting paid.