How long does a person need to own stock to qualify for getting that companies dividend?
So I own stock and mine doesn't pay a dividend, but i am thinking about cashing in my current stock and put my money in some stock with a high dividend yield. I was just wondering if there is a certain time length that you must keep your money in that particular dividend stock to qualify for the dividends, or if the company starts paying you the first quarter that you own the stock...
- 1 decade agoBest Answer
Hope this helps, but when it comes to owning a div player stock its really simple. when the company declares distribution you have 2 days from time of closing to buy in order to qualify, if you want to sell it 10 hours later no one is going to come to your door and ask for the money back. its a tax thing if you play it that way. if you miss the date of announcement and buy in 3 days later, well be prepared to wait another quarter. good luck with a high yield, high yield is like finding gold in your backyard. In my opinion stay away from money managers "MER' management expense ratio. can sometimes suck your investments. good luck with everything and maybe try an "ETF" exchange traded fund, commodities. or try the old fashioned way and make your calls to companies, read their filings ask the questions look at management. thats all i got
good luck. Landon
- StockJockLv 41 decade ago
There is no specified/legal amount of time you must own a stock before you are able to capture the dividend. When a company declares a dividend, the board of directors decided how much it will pay and on what day it is payable. They also declare a "record date". Anyone who owns the stock within 2 days after that record date (called the ex-date) is eligible to receive the dividend. If a company determined that the record date was March 1, as long as you owned it by March 3, you would recieve it.
But, be aware that when a company pays a dividend, all else equal, the price of the shares goes down by that amount on the ex-date (because the company no longer has the cash on its balance sheet and is now worth less). So, trying to time the dividend can result in tax consequences and little financial gain. Good luck!
- 1 decade ago
Some other user seem to be confused as to how the payment of dividends work. A company will delcare a dividend on a decleration date, which may be months before the dividend is actually paid. Next you have the Ex-Date, which falls two days before the Record Date. When you purchase stock it actually takes three days to 'settle' into your account, even though it appears to be in it instantly. You most own the stock on the Record date to receive the dividend, which means you must buy it three business days before. The Ex-Date is the first day the stock trades WITHOUT recieving the dividend. How long do you need to hold the stock to recieve the div? One day. You can buy the day before the stock goes Ex and sell it on the Ex-date.
Decleration date: Company says when it will pay Div.
Must buy stock atleast 1 day before Ex-Date.
Ex-Date: First day the stock trades without the dividend.
Record Date: Must be the shareholder on record on this date to recieve the payment.
Payment Date: Div is actually paid - can be months after record date.
Also historically stocks do infact open lower, but most of the time not by as much as the dividend.Source(s): Industry Pro
- jebediabartlettLv 61 decade ago
When you look at a quote, or sometimes you have to look at "company news" ...they state an ex-dividend date...to qualify for the next dividend payment , you must own the stock by that date.
If you are searching... look at this site:
it's an interesting " portfolio game" site, but he has a nice tab there marked " dividends" and it gives a great list of stocks with up-coming dividends and their ex-dates. Make a list of some nice ones then go study the companies.It can't "hoit"!
P.S. Don't off-hand know the next div or ex-date, but PCU is one great buy in the div area...with solid growth potential, too. ( high right now, but may not dip.. tough decision)
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- 1 decade ago
It would depend on the shareholders' agreement of that particular company. If there is no particular stipulation in the shareholders' agreement or adendum then you would receive dividends the next time they are declared. Usually a Board of Directors who declares a dividend will state" declares a dividend to be paid on (date) to the shareholders of record on (date)."Source(s): Education as a law clerk
- AngieLv 61 decade ago
Usually when a company declares a dividend, it's state "for owners as of X date." If you are an owner as of the close of business on that date, you qualify.
- 1 decade ago
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- Anonymous1 decade ago
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