X Factor: Four Stocks Reaching Their Ex-Dividend Date on December 31

By Christopher Witrak  DEC 24, 2012 11:05 AM

Rent-A-Center, Simpson Manufacturing, and Discover Financial Services are on the list.

 


MINYANVILLE ORIGINAL Four stocks will reach their ex-dividend date next Monday, 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. The company determines on the record date, which usually occurs two days after the ex-dividend date, which shareholders qualify for the dividend. Shareholders listed as holders of record after the record date then receive their dividend on the date of payment established by the company. Those purchasing right before the record 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 force since it can still take up to three business days for transactions to be credited to and settled in an investor’s account.

Below are four stocks that schedule December 31 as their ex-dividend date. All annual yields are estimated.

Rent-A-Center (NASDAQ:RCII) yields 2.38% annually and has a market cap of $2.08 billion. Rent-A-Center, together with its subsidiaries, leases household durable goods to customers on a rent-to-own basis primarily in the United States, Canada, and Mexico. It will pay a quarterly dividend of $0.21 on January 24, and its quarterly yield will be 0.59% based on Friday’s price of $35.30. The company has paid a quarterly dividend since the middle of 2010.

Simpson Manufacturing (NYSE:SSD) yields 1.54% annually and has a market cap of $1.57 billion. Simpson Manufacturing Co., through its subsidiaries, engages in the design, engineering, manufacture, and sale of building products. It will pay a quarterly dividend of $0.125 on January 24 and its quarterly yield will be 0.39% based on Friday’s closing price of $32.40. The company has paid a quarterly dividend since 2004, and each dividend payment has either increased or remained the same from the prior quarter.

Discover Financial Services (NYSE:DFS) yields 1.45% annually and has a market cap of $19.17 billion. Discover Financial Services, a bank holding company, offers direct banking and payment services in the United States. It will pay a quarterly dividend of $0.14 on January 17. The quarterly yield will be 0.36% based on Friday’s closing price of $38.50. The holding company has paid a quarterly dividend since the middle of 2007.

City Telecom (NASDAQ:CTEL) yields 12.03% annually and has a market cap $247.55 million. City Telecom Limited engages in the provision of multimedia production and contents distribution business and other multimedia related activities in Hong Kong.  It will pay a semi-annual dividend of $0.3670 on February 4, and its semi-annual yield will be 6.05% based on Friday’s closing price of $6.07. The company has paid a semi-annual dividend since 2007.

Twitter: @ChrisWitrak
No positions in stocks mentioned.