With the summer reporting season done and dusted, a boatload of UK shares go ex-dividend this month. That matters because if we’re not holding the stock before the ex-dividend date, we miss out on the payout.
All else equal, the share price drops by the size of the dividend on the day (normally a Thursday), although good or bad results can also send prices up or down. According to my data provider, 34 companies go ex-dividend on 11 September this week.
Here are three of them, each from a different index.
AIM
Let’s start with the smallest, which is AIM-listed Ramsdens (LSE:RFX). The pawnbroker will pay a 4.5p interim dividend for every share held on 9 October. That will be a 25% increase on the year before.
However, Ramsdens’ precious metals segment has been on fire due to the higher gold price, with people rushing to cash in their spare jewellery. In the six months to 31 March, the firm’s pre-tax profit surged 54% to a record £6.1m.
As such, shareholders will also receive a special dividend that brings the payout to 5p. This reflects strong commercial progress at the small-cap firm, which has grown its annual payout at a compound annual rate of 9.2% over the past few years.
Pair this with the 228% share price return since a 2020 pandemic low, and Ramsdens shareholders have little to grumble about.
While a sudden drop in the price of gold could see earnings growth slow, the stock doesn’t look expensive. It’s trading at 10 times this year’s forecast earnings and offers a 4% dividend yield.
Ramsdens is an exceptionally well-run company, making this share worth considering, in my opinion.
FTSE 250
Another stock going ex-dividend this week is Greggs (LSE:GRG). Unlike Ramsdens, the sausage roll maker won’t be dishing out any special dividends because its pre-tax profit fell 17% in the first six months of the year.
However, Greggs did generate enough cash to match last year’s interim dividend of 19p. This will be paid on 10 October.
Greggs is facing the same risks as many UK retailers — cash-strapped consumers, stubborn inflation, higher staff costs, and tumbleweed blowing down many high streets. Some investors are questioning whether pushing ahead with new shop openings in this environment is really a wise move. Time will tell.
Despite Greggs’ current challenges, the stock does look reasonably priced. Its going for 12 times next years’ forecast earnings, while sporting a 4.3% dividend yield.
I’m not looking at UK retail stocks right now, but a contrarian investor might want to dig in further.
FTSE 100
The final stock is the FTSE 100’s M&G (LSE:MNG). The asset manager will pay an interim dividend of 6.7p on 17 October, potentially resulting in a dividend impact of 2.57% this week.
M&G is the highest yielder of this trio, at 7.8%. At one point the yield was above 10%, but a 31% year-to-date rally has trimmed that.
Performance has been resilient, with net inflows of £2.1bn in the first half, a turnaround of £3.2bn from the same period last year.
Of course, this could reverse in the second half were markets to tank. And there seem plenty of potential catalysts brewing at the moment.
However, on balance, I reckon this one is also worth considering for high-yield income investors.
