Do I Still Get The Dividend If I Buy On the Ex-Date?
No, you will not get the dividend. You must own the stock by the ex-dividend date in order to receive the dividend. You would miss out on the upcoming coming dividend.
We have three key dates regarding dividends. They are all follows.
- Declaration Date
- Ex-Dividend Date or Ex-date
- Record Date
- Payment date or Payout Date
What is the declaration date?
Firstly, the declaration date is the date when a company will announce its next dividend. Sometimes it is just a few days prior to the ex-dividend date, other times it can be a month or so.
Each company is different. Their dividend payout schedule will also play a role in the timings. Eg. A monthly paying stock will be vastly different from stock that only pays out twice a year.
What is the ex-dividend date?
Up next is the ex-dividend date. This is the date in the witch the stock goes ex-dividend or some times it is just called the ex-date. Most of the time the ex-dividend date will fall one day before the record date.
The ex-dividend date is a crucial date for us investors. Almost a crucial as the all-important payment date or payout date.
Especially if you are attempting to catch that dividend. If you miss out on the ex-dividend then the dividend would go to the investor who sold you the stock.
Not to worry, we are in this for the long term anyway! Have a look at my Trading 212 Dividend Investing or Trading 212 Beginners guide. Missing out on the dividend might be annoying now, in 20 years it will not matter.
Make sure you invest in yourself as well with some of my must-read books, stock market and investing books will give you a head start.
Where Can I Find The Ex-Dividend Date?
You will want to to use a resource like Seeking Alpha for US stocks, there you will be able to find both the ex-date and the payout date of all your US stocks.
For your UK stocks, I suggest you use a combination of dividend max and dividenddata.
With those 3 sites, you will be able to find the ex-dividend date and payout date of all your holdings.
If you want a more automated approach like me. Then I suggest you create a Google Sheets spreadsheet and implement Fink API into. Have a read of my Finki API setup guide and you will automate this process in no time.
What is the Record Date?
After the ex-dividend date, we have the Record Date. This one is not so important for us. It is entirely out of our hands at this point.
A companies record date is simply when they look at who the current shareholders ‘on record’ are. Do not even worry about this date it’s irrelevant for us.
Typically the Record Date will happen one business day after the ex-dividend date. If the ex-date happens to fall on a Friday, then the Record Date would be the following Monday.
Assuming US Holiday is on the Monday as they often close the stock exchange.
What is the payout date?
Does this one really need an explanation? This is the date we all want to know. The payment date is the date when companies will pay their dividend.
Although, typically you might not actually get the dividend on the payout or payment date.
What? I hear you say.
Not to worry. Most brokers are normally a day or two behind especially if the payment date falls on a Friday. Personally, the longest I have had to wait was around 5 business days. That was for a US stock, I am in the UK.
That was the exception, not the rule. Most dividend payments are 1-2 business days behind the payment date.
Many new investors get worried they have done something wrong when they do not get their dividend on the payment date. I’m here to tell you this is normal.
I have found that with UK stocks I will normally get the dividend much quicker, with a 1-2 delay on US stocks.
Those are the important dividend dates we all must know. Some more important than others. Ex-dividend and payout or payment dates being the two you should be paying the most attention too.
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2 thoughts on “Do I Still Get The Dividend If I Buy On the Ex-Date?”
Thanks for the explanation (I needed this!) just one questions.
If you buy just before the ex-dividend date, when is the last date you can sell the shares (if you are after capital gains and the dividend is just a bonus) and still receive the dividend? Would this be the day after the record date so you are locked into the dividend payment but still able to sell the shares if you so choose? Hope I’m making sense here:-)
Yeah, the day after the record date you can sell and still get the dividend. Although most of the time a stock will fall by the dividend amount in the short term anyway so always a good idea to wait for it recover first. Thanks George