The dividends have kept coming thick and fast from FTSE 100 shares. Payments announced over the summer have steadily streamed in, or at least gone past their ex-dividend dates.
When a share goes ex-dividend, it means the company has declared a dividend, but the cut-off date to be eligible for that payout’s passed. Investors who buy the stock on or after the ex-dividend date aren’t entitled to claim the upcoming dividend.
Some of the UK’s biggest blue-chip shares have gone ex-dividend today. These are Centrica, Hargreaves Lansdown, Smith & Nephew, Weir Group, and Phoenix Group Holdings.
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Another three stocks from the Footsie will join the ex-dividend club next week too, on 10 October.
The 3 shares about to go ex-dividend
These are:
| FTSE 100 stock | Dividend per share | Dividend type | Payment date | Dividend yield |
|---|---|---|---|---|
| Taylor Wimpey (LSE:TW.) | 4.8p | Interim | 15 November | 5.6% |
| WPP | 15p | Interim | 1 November | 4.9% |
| Kingfisher | 3.8p | Interim | 15 November | 3.6% |
Investors who buy in before these ex-dividend dates can grab a dividend around four-to-six weeks from now.
Purchasing before these cut-off dates is a popular idea with share investors who invest for income, and for those that follow the ‘dividend capture strategy’. This investing concept involves buying a share before the ex-dividend date to claim the dividend and then selling up shortly afterwards.
But there’s an important thing to remember here. On the ex-dividend date, a company’s share price usually falls by roughly the amount of the dividend because new investors aren’t eligible to receive it.
So a stock that’s due to pay a 10p per share cash reward and closes at 100p per share, for instance, might open at 90p on the ex-dividend date. Bear in mind though, that other factors (such as broader market conditions and company-specific news) might see it open above or below 90p.
A Foolish takeaway
It’s my opinion that Taylor Wimpey might be a great dividend share to consider today. This may not be a surprise to regular readers who know I own it in my Stocks and Shares ISA.
Not only does the housebuilder offer that large 5.6% dividend yield for 2024, but expectations of a larger 9.64p per share cash reward for 2025 drives the yield to a substantial 5.8%. That’s up from a predicted 9.38p this year.
It’s important to note that dividends cover’s pretty poor for the period however. In fact, this year’s predicted dividend is higher than expected earnings of 8.07p per share. And 2025’s anticipated reward is barely covered by forecast earnings of 10.38p.
But signs of recovery in the UK homes market — combined with Taylor Wimpey’s strong balance sheet — give current dividend forecasts serious credibility. The FTSE firm also had net cash of £584m as of June.
Given the bright long-term outlook for the housing market, this could be a great passive income share for years.
