Hi all,

Wondering if someone could help me with how dividends work please... Say, if I buy some shares tomorrow (Tues) for a company going ex div on Wednesday, would I get dividend payments, if I sell first thing on Wednesday morning would I still be entitled?

Thanks in advance.

Hi fawner...basically you are correct in saying that if you buy shares on a Tuesday, you will then be on the register for the Wednesday. If the company goes ex div on a Wednesday then you can sell immediately the market opens, but you were officially regsitered on the Wednesday albeit for just a few minutes...you will then qualify for the dividend. The dividend is then paid out about 6 weeks later in most cases, but you can only glean that information from the official annual figures for that company. What I am unsure of is whether or not by buying on a Tuesday you are actually on the register in time for the Wednesday.Maybe check with your broker.
You should also bear in mind that the dividend to be paid is stated many weeks earlier, so why not get in once you know there is to be a big divi....dont wait until the 11th hour as peoples will already have bought in and the share price will already be 'containing ' the hike built in.
I recently put 2 k in Singer and Frieland bank and got out 2 weeks later with 200 clear profit on just the divi payment alone....I have now just bought into LSE who are paying a whopping 58.4p divi for those on the register on about July 27 and will pay on Aug 18th ( approx dates),. If you read their news you will see the exact details, but I bought in on Thursday last week at 3.74 ish...they are now 3.90 as more and more are trying to milk the divi situation the key to it all is DYOR and try to be a bit smarter than the average bear. But to satisfy yourself look at the two I mentioned and read their annual figures. If I can get 58.4 for every 3.74 invested I reckon I am getting a blinding result.........rgds...piston broke

Entitlement to dividend is different to being on the register. Entitlement is based on the ex-dividend date. Being on the shareholder register on the record date means that the dividend will come from the registrars. If you are entitled to the dividend through having held overnight on the Tuesday but are for whatever reason not on the shareholder register then the dividend will be paid to you by your broker and reclaimed by them from the market. This is sometimes necessary for small cap shares held via certificates, since the register can be out of date. This is the situation I was referring to earlier where the broker may need chasing.

All responses have been very helpful, much appreciated, thanks

fawner, if you have bought on a Tue and sold on the Wed you will get the div as per piston broke above but also remember on that Wed the company's value is less as the Div has been paid so the share price will reflect this automatically first thing on Wed. i.e You buy in @ 400 p/s on Tue and on Wed depending on the amount of Div given out the share price will automatically drop e.g 3800 p/s. What I'm trying to say is that you might have to wait a while to recoup your investment as Div alone might not make you profit.