X Factor: Three Stocks Reaching Their Ex-Dividend Date on February 1

By Christopher Witrak  JAN 28, 2013 10:35 AM

Waste Connections, Morgan Stanley, and Itau Unibanco Holding are on the list.

 


Three stocks will reach their ex-dividend date this Friday, 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 three stocks that schedule February 1 as their ex-dividend date. All annual yields are estimated.

Waste Connections (NYSE:WCN) yields 1.13% annually and has a market cap $4.33 billion. Waste Connections operates as an integrated solid waste services company. It will pay a quarterly dividend of $0.10 on February 19, and its quarterly yield will be 0.28% based on Friday’s closing price of $35.26. The company began paying a quarterly dividend at the end of 2010.

Morgan Stanley (NYSE:MS) yields 0.88% annually and has a market cap of $44.81 billion. The financial holding company will pay a quarterly dividend of $0.05 on February 15, and its quarterly yield will be 0.22% based on Friday’s closing price of $22.70. The company has paid a quarterly dividend since 1993.

Itau Unibanco Holding (NYSE:ITUB) yields 0.51% annually and has a market cap of $79.70 billion. The financial services company will pay a monthly dividend of $0.0073 on March 11. The monthly yield will be 0.04% based on Friday’s closing price of $17.64.

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

Twitter: @ChrisWitrak
No positions in stocks mentioned.