What is the “ex-dividend” date?

(excerpted from The Benefits of Stock Dividends, published June 2, 2011 at www.GoodfellowLLC.com)

 

“What else do I need to know about dividends?” Well, some stocks only pay their dividends once or twice per year, like DeVry Inc. Also, pay attention to the ex-dividend date. In order to earn the next dividend, you need to own the stock by the ex-dividend date. For example, Kimberley-Clark’s (KMB) next ex-dividend date is June 8, 2011. A person would need to purchase the shares by June 7, 2011 in order to earn that dividend.  Companies generally pay their dividend a few weeks after the ex-dividend date. But even short-term traders can earn dividends. A person who buys KMB shares on June 7, 2011, and then sells them a week later, will still receive the dividend, even though they no longer own the stock, because they owned the stock on the ex-dividend date!

 

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