It's definitely something to keep in mind when looking at share prices when it's close to dividend dates. If you're holding you just have to remember that the price may change a bit around the dividend date or the announcement date. Great video, well explained!

Good explanation. Thanks

I still dont understand any benefit of a company paying a dividend at all if its a zero net gain.

@TheSilentStryke

6 ай бұрын

Its not really a zero net gain, a company will hold onto a dividend when it believes the money would be better invested back into the company to result a higher share price for the holder On the flipside (largely mining companies) will decide to pay excess funds in a form of a dividend to shareholders because the money cannot be put anywhere substantial in the business to generate a return. So its better off in shareholders pockets. The price of a share would also roughly include the time until the next dividend is paid, so for example if bhp was $45 a share, and decided to pay $2 per share, the share price will be $43, if bhp somehow managed to perfectly keep the value of the company perfectly steady, not decline or increase, the share price should still gradually trickle back up to the $45 mark until the next dividend is paid.

@user-ll4td8vy2z

3 ай бұрын

If price is 45$ the company with x value = 45$ pay 5$ div. This 5$ it s paid from the company account NOT from marketcap¡¡ so if company havet same value I still do not understand how can price can go down when dividend is not paid from marketcap while company have same value, is not logical.

The answer to my question. THANK YOU!!

Great video 👍🏻

Are there any statistics showing how quickly share prices recover after paying out dividends? I'm just thinking whether dividend stripping works.

what about etf's ?

I hold shares but doing the covered calls during the ex-date, do i get the dividend....or they don't see i'm holding the shares? thx

Hi Sanjee, I don't think you've done a dedicated video on franking credits but that would be a good one to get an explanation from you

@SanjeeSen

2 жыл бұрын

Hi there! Thanks for the suggestion, I can certainly look into it, but there are some great videos and examples out there on the internet that explain how it works already. Also something you should probably discuss with your accountant as it might vary for your specific situation :)

Sir mere pass cdsl stock ke 50 share hai aur uska dividend upcoming hai. Toh agar mei abhi aur 50 share buy krlu toh kya muze pure 100share ka divided milega ya sirf 50 share ka milega.? Aur ha uski ex divided date ja chuki hai so please reply sir

I wrote a comment but it seems to have disappeared. The reason it drops equal to the value of the dividend is because the market is efficient. If the price is $10 today and will receive a $2 dividend tomorrow, then the price today is actually $12, because I'm guaranteed to get $2 tomorrow if I buy it now. The price you see before the dividend is paid out has already factored in the upcoming payout, so once the ex-dividend date is hit, the price drops by exactly that amount because the value that was already priced into the stock is no longer a factor in its valuation. This is the reason why AAA zig-zags up and down. The future dividend is priced into valuation of AAA every day, causing the price to rise up until the ex-dividend date, when it then resets back to its low.

I think it’s at least 2 days before ex dividend date then it will be pending the day after the ex dividend day I’ve tried this many times.

In my experience with Australian dividends, the price drops more than the dividend value when ex dividend. Many reasons I suspect. The dividend value is boosted by franking so taken into account. Secondly, a lot of traders and investors exit the share after ex date so a large volume of selling orders driving the price down.

@SanjeeSen

2 жыл бұрын

That's a great point David. I imagine there is quite a bit of selling pressure from the Dividend harvesting ETFs out there too.

Hi Sanjee, thanks for all your video's they have been very informative and the very first one actually convinced me to buy into my very first ETF. I was wondering if you could do a video ranking the ETF's with the best franking %?

I still not getting the point.... if a company x have value 10$ per share. But before earnings which is 1$ and it stay at same because shareholder keep price same, why should go down by the dividend? Yes money leave the company but the company do not pay from the marketcap!! The price should go down just because people sell the stock if they think it will be not good future for the company , not because the company pay div... normally the dividend should not affect the stockprice

You forget MAIN factory of the price drop; is the exchange!! So the exchange is valuing the company not the investors??????!!!

@user-ll4td8vy2z

3 ай бұрын

Good Point

if you buy share for 10 and sell fo 8, can you claim the loss to offset the dividend gain?

@Businessblend

Жыл бұрын

Dividends are taxed as income generally. Losses are dealing with capital gains tax. You can offset capital gains with capital losses up to a small dollar amount each year. So really no a capital loss does not offset dividend income

If the stock is 10USD and you buy it before the ex date then the price goes to 8 usd! hmm Yeew got 2 usd dividend from my own money and paid taxes from my own too (bonus) now my 10USD is 10-15% = 9.7 USD (this is just because of the exchange) hahahaha