If you want to be eligible for a dividend payment, or if you’re watching for possible share price falls, keeping up with ex-dividend dates can prove beneficial — as long as you hold the shares up to and including that day, you’ll get your money.
We have a number of FTSE 100 companies reaching that crucial date next week. Here are three of them that will go ex-dividend on Wednesday, 14 August:
AstraZeneca (LSE: AZN) (NYSE: AZN.US) shares will go ex-dividend with respect to a 90 cents-per-share interim dividend. Announced on 1 August, the payment is in line with the firm’s policy of paying a first dividend of around a third the value of the previous year’s total — last year shareholders received a total of $2.80 per share.
Current forecasts for the full year suggest a dividend in line with last year, of $2.80 (182p), and with the shares currently trading at 3,281p, that would provide a yield of about 5.6%. But that would be less than twice-covered, with falling earnings predicted for the next two years, and the shares down to a price-to-earnings (P/E) ratio of under 10.
It’s final ex-dividend time for drinks giant Diageo (LSE: DGE) (NYSE: DEO.US), with a payment of 29.3p per share. Added to an earlier interim payment of 18.1p, that makes a total of 47.4p for a yield of 2.5% on the share price at the time. And while the yield is not high, largely due to share price growth of more then 80% over the past two years, Diageo does have a record of regularly raising its dividend above inflation — it’s done it every year this millennium so far.
With the share price up to 2,147p today, forecasts indicate a P/E of 19, which suggests to me that the recent price rise is at least set to slow. And if you want decent dividend income, I think there are better candidates out there now.
GKN (LSE: GKN) lifted its first-half dividend by 8% to 2.6p per share when the engineer released first-half results on 30 July, and ex-dividend day is next Wednesday. A similar rise in the final dividend would deliver 7.9p per share, and with the shares currently priced at 350p, that would provide a yield of 2.3%.
The firm did say its dividend rise was due to “improving trading performance“, telling us that “with a stronger second half profit performance anticipated, GKN expects 2013 to be a year of good progress for the group“, and that bodes well for future dividends.
Finally, dividends like these can add nicely to your investment returns — they can be spent or reinvested according to your needs. Whether investing for income or growth, good old cash is always welcome.
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> Alan does not own any shares mentioned in this article.