Slay with Stocks Challenge: Day 5 – Account Elevation: Dividends

//Slay with Stocks Challenge: Day 5 – Account Elevation: Dividends

Slay with Stocks Challenge: Day 5 – Account Elevation: Dividends

This training/challenge is for educational and informational purposes only.  These materials do not constitute a recommendation to engage in any particular securities transactions.

 

Investment products are: Not FDIC insured | Not guaranteed by the bank | May lose value

 

Week 1: Stock Basics

This week’s goal is to introduce you to stocks and help you build a foundation for investing in the stock market.  This is a great place to start if you are a beginning investor or would like a refresher if you have already started on your investing journey.

 

Dividends

Dividends are a portion of a company’s earnings paid out to the shareholders.  If you own stock in a company that pays dividends, then you can receive those dividends as cash, stock, or some other form of property.  Dividends are decided by the board of directors for a company and the amount can change.  A company may provide shareholders with dividends monthly, quarterly, or annually.  Not all companies provide dividends and there are some companies that may issue dividends on an infrequent basis.  For the purposes of this challenge, we will focus on cash dividends. 

 

Day 5 – Account Elevation: Dividends

The Dividend Rate tells you how much you will receive in terms of dollar per share.  The Dividend Yield tells you the return on your investment in terms of a percent.  To an investor, understanding the dividend yield is more important than the rate because it really tells you how much “bang for your buck” you are getting.  The higher the dividend, the better the bang and obviously, more bucks.  Although a company’s stock price may not move very much in either direction, you can still make money if the company issues dividends.  Ultimately, you want a company to provide both: an increasing stock price and a consistent dividend.  It’s truly a win-win and will put your investment account on steroids. 

 

With receiving dividends to reinvest, compounding interest to grow your account and you consistently buying shares, it’s a formula for reaching your financial goals that give you peace of mind.   You can stack your money by indicating that you want to reinvest the dividends.  This will trigger the brokerage firm to simply buy more shares for you, which helps to increase your dividend payout the next time the company issues them.  If you are looking to receive a check, you can also have your dividends paid out to you.  Investors looking for dividend income need to look for companies that have a high and very stable dividend yield for cash flow purposes.  If you decide to cash out, then the dividend income will be added to your income for tax purposes.

 

Getting Paid

In order to receive a dividend, you must own the stock by a certain date.  This date is called the “Ex-Dividend” date.  All shareholders are eligible to get paid a dividend if they own the stock on this date.  Once the board of directors declares a dividend, they will let the public know (which includes you, too), the very critical “Ex-dividend” date.  They will also announce the amount of the dividend and the date you can expect to receive your payment or have the funds reinvested into your account.   If you have been watching a stock and want to buy, then you must buy the stock at least 3 business days prior to the “Ex-Dividend” date to be sure you can get your money.  Lastly, if you decide to sell your stock after the “Ex-Dividend” date, the company will still cash you out and you will receive a dividend payment.  Pretty cool, right?

 

Today’s Investing Activity:  Use the stocks from your watch list to locate the dividend information for each stock.  Calculate what the dividend payment will be (or would have been) on 1,000 shares.

 

You can use my Cash Dividend worksheet to help you with today’s activity. Feel free to take a screen shot of your worksheet and share with the group or leave a comment with your results.

 

If you are using the Yahoo! Finance app to complete today’s activity, then follow these step:

  1. Enter the ticker symbol
  2. Scroll down and Click “View more data”
  3. Scroll to the bottom to the “Dividends & Splits” section
  4. Use “Forward Annual Dividend Rate” and divide by 4 to get the most recent payment
  5. Use “Forward Annual Dividend Yield” for the Dividend Yield

 

 

STEP ONE:

Select the stocks from your watch list and locate the dividend information

 

STEP TWO:

Write the Ex-Dividend Date, 3-Business Days Prior, Dividend Rate, and Dividend Yield
Calculate the Dividend Payment for 1,000 shares

STEP THREE:

Share a screenshot of your worksheet in The Stocks & Stilettos Society or let us know in the comments below

ADVANCED: Set appointments in your smart phone for the next quarterly (or monthly) dividend date for each dividend stock you own.  Also, set an appointment for 3 days prior to the nest ex-dividend date for each stock you wish to own by the end of Q2-2018 (or June 30, 2018).

Friday Freebie

Here’s a resource I use to research companies that have upcoming dividends.  There is a ton of information on the site.  However, I use it primarily to help my clients put together a dividend strategy.  It’s Free!


 

 

Today’s activity focuses on another element that makes a powerful investment: Dividends.  They allow you to build your account faster, but you have to be an owner to reap the benefits of these cash back rewards.

 

Tomorrow: Day 6 – Saturday Skill Check

 

Follow me here:

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Facebook: @StocksandStilettos

Twitter: @StocknStiletto

Group: bit.ly/stocksandstilettos

Happy Investing!

 

 

 

Cassandra

By | 2018-01-12T05:41:05+00:00 January 12th, 2018|Categories: Uncategorized|4 Comments

4 Comments

  1. Dex January 14, 2018 at 10:02 pm - Reply

    This was a great exercise. I’m learning a lot.
    Happy Sunday! How about those Jags…Huh….huh.!? Duuuuuvvvvaallll 🙂

    Forgive me ladies..got a little excited. Several from my watch list:

    1. VZ: Stock Price $51.86. ExDate = 1/23 (1/19) Y=4.5% DR = $2.31 @1K Shares = $2,310.00
    2. F: Stock Price $13,23 ExDate = 1/24 (1/20) Y=4.54% DR = $0.60 @1K Shares = $600.00
    3. GM: Stock Price $44.07 ExDate = 2/6 (2/2) Y=3.45% DR = $1.54 @1K Shares = $1,520.00
    4. GE: Stock Price $18.97 ExDate = 1/24 (1/20) Y=2.56% DR = $0.95 @1k Shares = $950.00
    5. WMT: Stock Price $100.87 ExDate = 2/20 (2/18) Y=2.02% DR = $2.03 @1k Shares = $2,030.00

    Some on my watch list had no Ex-Dividend dates, Yield, nor Dividend Rate information available. What’s going on with that?

  2. Adria January 17, 2018 at 1:56 am - Reply

    Should we divide by 4 to get the yield as well like we did with the dividend rate? How do we know what the dividend pay date is?

    • Cassandra January 17, 2018 at 6:37 am - Reply

      Yes. If you divide the dividend yield by 4, then you will have the quarterly dividend yield. The Dividend Pay Date should be reflected in the app amongst the other dividend information.

      Happy Investing!

      Cassandra

  3. Urcelon Walker January 18, 2018 at 4:48 am - Reply

    NOC
    Ex-Date 12/1/2017
    3 days prior 11/28/2017
    DR 4 × 1000 = $4000
    DY $1.27

    HII
    Ex-Date 11/22/2017
    3 days prior 11/17/2017
    DR $2.88 × 1000 = $2,880
    DY $1.16

    AMZN – no dividend
    Ex-Date
    3 days prior
    DR
    DY

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