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Old 30-05-2015, 12:57 PM   #16
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If u are interested in a company, will u buy before or after it issues dividend? any difference in terms of strategy and mentality and why?
Thanks
if the company is good you can get dividends, as well as capital gain. so buying for dividends is not totally useless.
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Old 30-05-2015, 12:58 PM   #17
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If u are interested in a company, will u buy before or after it issues dividend? any difference in terms of strategy and mentality and why?
Thanks
You will buy the shares because you believe that the price will go up? Isn't that more important than buying CD or XD?

Maybe you need to check out the "what investing book for beginner to read" thread?
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Old 30-05-2015, 01:01 PM   #18
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you can buy into good companies eg blue chips that pay consistent dividends. unless you have no full time job, otherwise, you can put a certain amount of your income into these dividends machines and earn passive income. Not forgetting you can reinvest these dividends you get on top of your accumulation of the stock. Using the dividend approach is not totally useless like some might say.
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Old 30-05-2015, 01:05 PM   #19
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Why retail investors love dividend?

1. They are simply just ignorant about the effect of "right pocket in and left pocket out"
2. Good for bar's talk. Just image 1 guy speak out loudly "You know my dividend is enough to cover my Drinking expenses" and everyone with the looks of admiration. However he makes no reference to the total return @_@
3. Statically, dividend paying stocks outperform no or low dividend paying stocks. However most people understand it with the WRONG reason.

It is not the dividend that come in the form of Income that give you the better return. It is because of the re-investment of dividend collected that offer greater total return in portfolio perspective.
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Old 30-05-2015, 01:16 PM   #20
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In fact, having no dividend is better because you are in control of when you receive your dividend.
yes and take a loss in commission when you sell stocks which has potential to grow in the long term.

if you want to hold a stock for 10-20 years, you cant really do that.

e.g if ST engineering give 0% dividends, and you bought it when it is $1.00. Now ST engineering is $3.50 and you think it still has potential in the long term. You don't really want to sell and want to keep it for the long term, so the only way you can do is to sell a partial part of it and then lose a bit of $$$ to commission.

But if ST engineering gave 5% dividends instead, you wouldn't have to worry about all this, and can either choose to keep the dividends or to reinvest back into the stock.

so I will continue to be hard up over dividends, but of course dividends should not be the only thing people look at.
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Old 30-05-2015, 01:46 PM   #21
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If u are interested in a company, will u buy before or after it issues dividend? any difference in terms of strategy and mentality and why?
Thanks
it depends on whether buying before dividend or after will give me excess returns

if buying after dividend will give excess returns, I will buy after dividends
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Old 30-05-2015, 01:47 PM   #22
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In before dividend warrior
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Old 30-05-2015, 01:48 PM   #23
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3. Statically, dividend paying stocks outperform no or low dividend paying stocks. However most people understand it with the WRONG reason.

pls show the article or study that shows that dividend paying stocks outperform no or low dividend stock?
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Old 30-05-2015, 01:49 PM   #24
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When invest in stock market, why are people so hard up over dividends?

That day I discussion stock market with friend, they say they look at dividends first. No dividend no talk. even my finance trained friend also say he look at dividend first. I hear him say this buei ta han dunno what he thinking.

I was thinking, dividends dont matter. The idea of receiving dividends every year sounds nice, but if you think carefully, its just left pocket right pocket. When you receive dividends, the share price will drop together with the dividend.

In fact, having no dividend is better because you are in control of when you receive your dividend.

Shouldnt other valuation ratios be more important?

So really, why are people so hard up over dividends when they invest?


no offense to dividend warrior, just trying to have healthy debate so everyone become wiser. I know dividend warrior subscribe to the idea of dividend + growth. I dont agree with dividend, but I agree with growth.



-----------------------------------
the returns you get when choosing high dividend stocks vs low dividend stocks. there is NOTABLE NO DIFFERENCE!

-------------------------
Sing Inv SING INVESTMENTS & FINANCE LTD

Look at this company
Do rights issue. Then after that do dividend issue.
How dumb is that? Give you a Drumstruck , then take away the whole chicken

This type of company must avoid because they are doing stupid things

--------------------------

High Dividend stocks - Good or bad? Buy liao can huat big big?

I see buying dividend stock seems to be very in. Buy liao every year company give you money. Shiok shiok.

Is it really good or bad? Dividend give you liao the price will automatically devalue. End up also back to square one mah? Left pocket right pocket.

Why is it when come to investing, people think of dividend as 1 of the top priority? Is it the right way of investing?

Preferably Please dont say something generic like "depend on strategy". Break it down into its nuts and bolts in terms of risk reward liquidity returns etc
wahkao3 you finally posted something that is meaningful, regular disgruntled readers of your post should feel impress.

From my understanding of dividend and countless reading of articles talking about dividend stocks, there are a few well-supported points for dividend-paying stocks:

1. Left pocket in, right pocket out(LPRP) effect exists, and it's not hard to see! Hence in total return perspective Dividend does not offer you any return!

2. The reason why people like Dividend warrior or many others pursuing dividend-growth strategy and have incredible success.

Is because a company who has the ability to increase and pay its dividend from time to time is the best prove of its cash-generative ability. And of course companies who can afford to do that is also companies whom have sound balance sheet, and probably other competitive advantage as well

By that understanding it should not come as a surprise that share price goes up, recover from the drop in ex-div and offer greater total return!

Again, most people understand it for the wrong reason, It is not the high or low amount of dividend you received that determine your returns. So people buying stocks that only look at dividend as sole criterion is heading nowhere.

So in that sense my point 2 is simple. Dividend strategy that works(I believe) is based on Growth of dividend rather than paying of dividend.

3. In a portfolio perspective, dividend paying stocks give investors an opportunity to reinvest collected dividend in other stocks where investor would otherwise not able to. It is this extra flexible that gives greater return. Of course the flip side of it is investors may invest in lower return stocks, and higher transaction cost due to reinvesting. Both of which will undermine return.

4. On my portfolio I only invest in super under valued stocks that offer dividend at least 3%(At present). The reason is not because dividend give me return. But in my current aggressive allocation of capital to equity make sense for investing in stocks that offer dividend.

I certainly do not want to sell my stocks at the time of crisis, and that might also be the period that I needed money the most since I may lose my job, hence dividend solve that problem of meeting my short term liquidity needs with zero transaction cost(most importantly) as compared with selling the stocks just to fulfill liquidity needs.

Investing in stocks with dividend has never been my goal. But if there is Stock A and B both have the same under valued characteristic but one offer dividend and the other doesn't, then I will certainly choose the one that does.
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Old 30-05-2015, 01:52 PM   #25
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yes and take a loss in commission when you sell stocks which has potential to grow in the long term.

if you want to hold a stock for 10-20 years, you cant really do that.

e.g if ST engineering give 0% dividends, and you bought it when it is $1.00. Now ST engineering is $3.50 and you think it still has potential in the long term. You don't really want to sell and want to keep it for the long term, so the only way you can do is to sell a partial part of it and then lose a bit of $$$ to commission.

But if ST engineering gave 5% dividends instead, you wouldn't have to worry about all this, and can either choose to keep the dividends or to reinvest back into the stock.

so I will continue to be hard up over dividends, but of course dividends should not be the only thing people look at.
this are really very minor considerations
the most important is: Is the company creating value for share holder? For example, a company invent the cure for cancer. That's really good shareholder value creation because a cure for cancer is something that;s valuable.

if the company declare more dividend, its just left pocket right pocket transaction. no value creation at all
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Old 30-05-2015, 01:54 PM   #26
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pls show the article or study that shows that dividend paying stocks outperform no or low dividend stock?
Yo! hahaha I so excited to show you!

Tweedy Browne, The High Dividend Yield Return Advantage


Teh Hooi Ling, on show me the money series
Time to re-assess price-to-book stock picks?
Including dividend yield in the decision appears to capture the cream of the crop

Google the above, I have not enough post count to post link!
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Old 30-05-2015, 01:56 PM   #27
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Dividend has its uses don't get me wrong. Companies that don't pay dividend most of the time(Biosensor, Marco polo) tend to do badly mainly because the shareholders want to be rewarded for waiting. Even though dpu theoretically is subtracted from the share price, it removes exposure risk to the investor.

A company earns X amt of money yoy and puts it all back into the company and to remunerations makes it look like an aggressive growth model, but the shareholders will always tend to sell when the share price isn't performing well for a simple fact that if you dont reward them, they have no incentive to stay vested. Which also means companies that are dividend aristocrats(increasing div payout yoy tend to be less volatile and more welcoming)

A stable dividend distribution of 6% yoy means investors can get back their principle amount in 16years. Whereas a company that is "selfish" and distributes nothing, its investors will never get back their principal passively.

Last edited by SCG8866T; 30-05-2015 at 02:07 PM..
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Old 30-05-2015, 02:44 PM   #28
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this are really very minor considerations
the most important is: Is the company creating value for share holder? For example, a company invent the cure for cancer. That's really good shareholder value creation because a cure for cancer is something that;s valuable.

if the company declare more dividend, its just left pocket right pocket transaction. no value creation at all
then you already answered your question, just look for dividend paying stocks that create value for share holders. easy
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Old 30-05-2015, 03:34 PM   #29
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In before dividend warrior
I shall grace this thread with my presence.
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Old 30-05-2015, 03:50 PM   #30
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How do u know if buying before the x dividend date giving you excess returns compared to buying after x div. date? or vice versa?


it depends on whether buying before dividend or after will give me excess returns

if buying after dividend will give excess returns, I will buy after dividends
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