X Factor: 5 High-Yield Stocks Reaching Their Ex-Dividend Date on September 6

By Christopher Witrak  SEP 05, 2012 11:10 AM

PPL Corporation, Reynolds American, and Pepco Holdings are on the list.

 


MINYANVILLE ORIGINAL Many stocks will reach their ex-dividend date tomorrow which is significant for investors as the seller of the stock on that date, not the buyer, receives the most recent dividend.

A stock must be bought one day before the ex-dividend date to claim any dividends that have been announced but not yet paid. Dividends are paid on the dividend record date, usually two business days after the ex-dividend date.

Purchasers must own a stock several days prior to the dividend record date to get the dividend. Those purchasing right before the date forfeit the dividend and normally get the stock for a reduced amount.

It may seem an anachronism in this era of high frequency trading, but the dividend rate rules are in effect since it can still take up to three business days for transactions to be credited to and settled in an investor’s account. (See also: 10 Undervalued Dividend-Paying Stocks With Momentum.)

Below are five high-yield stocks that schedule September 6 as their ex-dividend date. All annual yields are estimated.

Enerplus Corporation (ERF) yields 6.84% annually and has a market cap of $3.12 billion. The North American oil and gas producer will pay a monthly dividend of $0.09 on September 20. Its monthly yield will be 0.57% based on yesterday’s closing price of $15.80. The company began paying a monthly dividend at the end of 2000. The sharp drop in natural gas prices over the past year have hurt the company’s cash flow and forced Enerplus to cut its monthly dividend in half this year from $0.18 to $0.09.  

Lower commodity prices have hurt Enerplus, and this was reflected in the company’s second quarter earnings. Net income declined from $271.39 million, or $1.52 per share in the prior-year quarter, to $101.57 million, or $0.52 per share, in the recent quarter.

Regal Entertainment Group (RGC) yields 6.03% annually and has a market cap of $2.15 billion. The theater operator will pay a quarterly dividend of $0.21 on September 18. Its quarterly yield will be 1.51% based on yesterday’s closing price of $13.92 The company has been paying a quarterly dividend since the end of 2002.

Weaker movie attendance has hurt Regal Entertainment. Total movie revenue was down 1.2% in the second quarter. Regal’s revenue for its second quarter dropped from $753.3 million in the prior-year quarter to $723.3 million in the recent quarter.

Pepco Holdings (POM) yields 5.56% annually. The mid-Atlantic-based energy delivery company has a market cap of $4.45 billion and will pay a quarterly dividend of $0.27 on September 28. Its monthly yield will be 1.39% based on last Friday’s closing price of $19.40. The company has paid a quarterly dividend since 1987.

Pepco's second quarter results fell below estimates. Net income decreased 34% from $94 million, or $0.42 per share, in the prior-year quarter to $62 million, or $0.27 per share, in the recent quarter. The company reported an adjusted net income for the second quarter of $0.25 per share. The average estimate for net income was $0.35 per share. Revenue fell 16.3% from the prior-year quarter to $1.18 billion. The average estimate for revenue estimates was $1.87 billion.

The average net income projection for Pepco’s third quarter has fallen from $0.44 to $0.39, and the average net income projection for the entire year has fallen from $1.25 to $1.23.

Reynolds American (RAI) yields 5.08% annually and has a market cap of $26.27 billion. The second largest tobacco company in the United States will pay a quarterly dividend of $0.59 on October 1. Its quarterly yield will be 1.31% based on last Friday’s closing price of $46.46. The company has been paying a quarterly dividend since the middle of 1999, and the dividend has never declined since the beginning of the payouts.

Reynolds had a mixed second quarter this year. Net income increased 35.5% from $327 million, or $0.56 per share, in the prior-year quarter to $443 million, or $0.78 per share. The company reported an adjusted net income of $0.79. The average net income estimate for the quarter was $0.76 per share. Revenue decreased 4% from the prior-year quarter to $2.18 billion. The average revenue estimate was $2.25 billion.

Reynolds has missed revenue expectations for two consecutive quarters. Yet average net income projections for the third quarter have increased $0.01 to $0.80. Average net income projections for the year have also risen by $0.01 to $2.95 per share.

PPL Corporation (PPL) yields 4.86% annually and has a market cap of $17.20 billion. The energy and utility holding company will pay a quarterly dividend of $0.36 on October 1. This dividend results in monthly yield of 1.22% based on last Friday’s closing price of $29.61. The company began paying a dividend in 1985, and PPL made the dividend quarterly in 1989.

PPL also had a mixed second quarter this year, beating net income estimates but missing revenue estimates. Net income increased from $196 million, or $0.35 per share, in the prior-year quarter to $271 million, or $0.46 per share. The average net income estimate was $0.39 per share. Revenue fell 2.4% from the prior-year to $2.55 billion in the recent quarter. The average revenue estimate was $3.14 billion.

While PPL’s third quarter net income estimate has risen $0.01 to $0.70 per share, the net income estimate for the fiscal year has dropped from $2.33 to $2.31.

These companies also have their ex-dividend date on September 6. All annual yields are estimated.

CME Group (CME) yields 3.25% annually and will pay a quarterly dividend of $0.45 on September 25.

Titanium Metals Corporation (TIE) yields 2.50% annually and will pay a quarterly dividend of $0.075 on September 19.

Coach (COH) yields 2.09% annually and will pay a quarterly dividend $0.30 on October 1.

WellPoint (WLP) yields 1.94% annually and will pay a quarterly dividend of $0.2875 on September 25.

CBS Corporation (CBS) yields 1.34% annually and will pay a quarterly dividend of $0.12 on October 1.

Purchase -- and have your broker settle -- before the ex-dividend date to secure the dividend.

(See also: 11 High-Quality Dividend-Paying Stocks to Consider Ahead of First Quarter)

(See also: SEC Says Retail Investors Are Clueless About Stocks.)

Twitter: @ChrisWitrak
No positions in stocks mentioned.