Take a typical NLY dividend stock, which I took note of back in the distant 2006 year and still follow. I don't know how now, but in those years she was included in the top recommendations of S&P and had five stars from them. Type, good, healthy, promising company, regularly pays out dividends of about 20% per annum. By the way I, front 2008 year it was just bought with a long-term goal of receiving dividends. But quickly came 2008 year and, not only has the share price dropped significantly, so the company unexpectedly announced a significant reduction in the size of dividends. So I had to sell it at a loss., since there was no point in keeping her.
Using this typical American dividend stock as an example, let's see what happens and what it looks like..
1) Firstly, the day after the cut-off, the share price falls by the amount of dividends.
In the US, quarterly dividends are usually paid. I.e, in this case it turns out 1,2 dollars per year per share. At a price 10 dollars per share is about 12% per annum.
In the comments of previous posts, the opinion was expressed that the price after a dividend fall quickly recovers to its previous value. Well, yes, it happens that it is restored, but that's just because stocks go up or down by themselves, not because of dividends. As you can see above, the price has never recovered.
2) It is believed that with a significant drop in the share price, the percentage of dividends will increase significantly, because, ostensibly, in dollar terms, the company never reduces the amount of dividends. In fact, it also decreases. Look here:
At the beginning, at share price 18-19 dollars the amount of the dividend was 0,65 and gradually decreased by the company as the price fell. At the stock price 10 dollars the amount of dividends decreased to 0,3 Dollars. That is, throughout the entire time (the duration of the graph 5 years) the annual dividend percentage was approximately the same in the amount 12-14%.
3) Having received dividends from the investment share, придется заплатить tax ни за что, on the empty place (for Russians 13%, and for Americans much more). This despite the fact that there is practically no dividend, since the share price after dividend payment fell by exactly the amount of the dividend. And if the company did not pay dividends, then the share price would not fall and there would be no need to pay tax.
So there is only one loss from dividend stocks :)
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Bonus for believers in dividends:
If you believe that the price rises after the dividend fall, then here it is the grail. Just buy stocks after the dividend gap and place take profit on the close of the gap. And there will be no need for any dividends. :)
