Tuesday, 31 March 2015

How to Earn from Dividends??

A dividend is a distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property. (Heto yung kinita ng kompanya na gusto ibigay ng board ang ibang part nito sa mga shareholders para maging masaya sila at makuha ang returns).

Remember the 3 Important Dates:

Date of Declaration - the time the company announced that shareholders will received the dividends, usually happens at annual stockholders meeting. (Check Dividends and Rights Tab of PAM PSE Tracker).

Ex Date - if you want to receive the dividends, you should hold the stock at the day before Ex-date. In the example above, for you to be entitled for dividends , you should have it on your portfolio on March 30, 2015.(Kailangan hawak mo na sya bago pa ang Ex Date na March 31).

Questions: Can I still receive the dividends if I buy and sell the stock on March 31?  No.

                  Is a stock usually goes down on the ex date? Not really, Bloom is a good example that maintain the price on the ex date. On the other hand, PSPC suffered from selling pressure on the ex date and went down by 10%. The impact of dividends declaration on Bloom has a minimal impact compared to PSPC.

Payment Date - Happy Day. The time dividends will reflect on your portfolio, brokers usually send an email to those stockholders entitled once payment is made.(sometimes late payment due to clearing process).

How to play with Dividends?

First, 2 weeks before the ex date, watch the  movement of stock and buy at the possible bottom price.

A good example is Bloom:

Second, If you want to sell on the ex date, then you have a pretty good amount of gains. (I will share different scenario on Newbie Intensive Trading Course)

On this example dividends calculated as  40000 sh  x .05 =  2000 pesos . 

Total Gains  = 20 067.40 pesos 

Sincerely yours,

Jonathan I. Ruiz

P.S. FOR MORE EXAMPLES, PLEASE ENROLL FOR NEWBIE INTENSIVE TRADING COURSE !! CLICK THIS LINK  http://www.newbie.ph/2015/03/newbies-intensive-trading-course.html .

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