There are quite a few FTSE350 companies lining up to pay special dividends alongside their usual dividend payment over the next few weeks. Starting with ITV and Admiral who go ex-dividend tomorrow.
ITV - current price around 125p, 1.8p dividend, special dividend 4.0p - total 5.8p per share.
Admiral - current price around 1293p, dividend 21.4p, special dividend 24.1p - total 45.5p per share.
Fidessa - current price around 1793p, dividend 24.5p, special dividend 45.0p - total 69.5p per share.
Antofagasta - current price around 891p, dividend 8.4p, special dividend 52.0p - total 60.4 per share.
888 Holdings - current share price around 169.5p, dividend 3.02, special dividend 1.34p - total 4.36 per share.
You can work out the % yourself, but only 888 at around 2.5% are paying something close to the very low IR's currently available on savings with your local friendly bank.
Ex dividend dates
1st May - ITV and Admiral
8th May - Antofagasta and Fidessa
15th May - 888 Holdings
Now, upon the payment of these dividends the share price is likely to fall by at least an equivalent amount to take into account the dividend, but quite often, and especially if the company itself has been in a strong uptrend prior to payment, the share price will often quickly recover and then go higher. A recent example of this is Beazley who paid a special dividend + interim dividend of 14p per share, which at the time was about 7% when the share was priced around 200p after the ex date. Today the share price is around 223p.
Of the companies above, Antofagasta might be the most risky simply because it is a mining company and they have been slumping recently. It has fallen around 24% in the last 3 months.
It can be a good strategy to buy before the dividend date if you are confident that the company has the solid fundamentals and momentum to continue to do better after the dividend has been paid. One theory on companies paying special dividends is that they must be doing ok to have the surplus cash to make an extra payment, especially at a time of low IR's on cash at the bank. So, as always there is an element of risk, but for now quite a few FTSE companies are flush with cash and looking to pay it to shareholders.
Investing in stocks that earn dividends is a great advantage of the stock market. The stocks have the ability to increase the prices, creating two ways for the stock to earn money for the investors. Finding these stocks is also not a difficult task. It is easy to monitor the stock’s share price. Investors can get the information from newspapers and magazines, as well as online. At the present time the stocks in United Kingdome have a positive performance. It will be profitable for investors to invest some of the Uk dividend stocks.
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