# Beginner's question on Dividend Payment



## garcanfin (Aug 12, 2010)

Hi, I am a newbie just recently started experimenting with stocks trading via TD Waterhouse. Just wondering for companies that pay dividends (e.g. SunLife etc.), under what conditions will I receive any form of dividends, and in what ways. Thanks.


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## peterboro31 (May 11, 2010)

http://www.dividendinvestor.ca/index.php?symbol=RCI__B

Type the tsx symbol in stock quote box; you will get good info on the stock.

To answer your question; if you own the stock and still do at the ex date, the dividend will go to your CASH account with TDW. Some stocks have DRIP ; check their web sites.


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## HaroldCrump (Jun 10, 2009)

garcanfin said:


> Hi, I am a newbie just recently started experimenting with stocks trading via TD Waterhouse. Just wondering for companies that pay dividends (e.g. SunLife etc.), under what conditions will I receive any form of dividends, and in what ways. Thanks.


The dividend will show up as cash in your account the day after the official payment date, assuming you held the stock on the record date.
Some brokerages, including TDW, offer a dividend re-investment plan (DRIP) for certain stocks.
If you sign up for such a plan, the brokerage will automatically buy the maximum possible whole number of shares it can with the amount of dividend.
I suggest buy the dividend stock of your selection and wait a few quarters to experience how the dividend payments work before you decide to sign up for DRIP plans.


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## Cal (Jun 17, 2009)

For more info on drip plans you can check out Jon202's site at:

www.dripprimer.ca

Or you could use: http://cdndrips.blogspot.com/

Or for drip related questions: www.dripinvesting.org

For American info I would recommend the little book of big dividends as a primer.

But all of the info given above is great.


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## bltman (Aug 12, 2010)

I recently added BMO's REIT Index ETF to my wife's RRSP account at BMO investoreline. Because it makes up a really low percentage of the account, if I do not choose to follow through with the DRIP, the dividends will just sit there doing nothing. BMO's minimums are so high for anything that involes short term interest. In this case does it make sense to implement a DRIP right away?


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## dilbert789 (Apr 20, 2010)

bltman said:


> I recently added BMO's REIT Index ETF to my wife's RRSP account at BMO investoreline. Because it makes up a really low percentage of the account, if I do not choose to follow through with the DRIP, the dividends will just sit there doing nothing. BMO's minimums are so high for anything that involes short term interest. In this case does it make sense to implement a DRIP right away?


Unless you are planning on doing something with the cash, OR do not have enough shares so that the dividend would be able to buy another share anyways I don't see a reason why you wouldn't setup the DRIP. A DRIP shouldn't cost you anything and depending on the DRIP can come with a nice discount on the share price.


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## peterboro31 (May 11, 2010)

Link not available to public; locked by pass word. Sorry.

Set up a pseudo portfolio set up to reflect activity from January 4,2000 to yesterday (August 12, 2010); there have been 2 recession downturns, with the major being 2007/2008. It appears to show that buy and hold can work, rather than timing the market; at least for dividend stocks; but not suitable to buy and hold for a RIF; e.g.: Value late 2007 $40k , Feb. /09 $20k. Setup with 10,000 dollars in 2000; current balance 28,677 dollars, an 184.1% increase via price and dividends..


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## Addy (Mar 12, 2010)

peterboro31 it's telling me "You must log in to access your portfolio holdings" when I click your link.


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## bean438 (Jul 18, 2009)

dilbert789 said:


> Unless you are planning on doing something with the cash, OR do not have enough shares so that the dividend would be able to buy another share anyways I don't see a reason why you wouldn't setup the DRIP. A DRIP shouldn't cost you anything and depending on the DRIP can come with a nice discount on the share price.


UNless Investorline is different than all the other brokers, you will not get a DRIP discount on a synthetic drip.

Personally I prefer straight up cash. Just because I own a company doesnt mean it is always a good investment i.e. share price is too high.

Cash allows me to wait until something I want is being sold for a reasonable price.


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## Belguy (May 24, 2010)

Ditto to bean438. I take the cash and reinvest it usually quarterly where I want to put it.

Many of my ETF investments do not offer DRIP's and I believe that some discount brokers do not as well if I am not mistaken.


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## Cal (Jun 17, 2009)

Bean - Investorline must be different. Even the banks pass on the drip discounts, you just have to ask them to, and it is done no problem.


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## bltman (Aug 12, 2010)

Belguy said:


> Ditto to bean438. I take the cash and reinvest it usually quarterly where I want to put it.
> 
> Many of my ETF investments do not offer DRIP's and I believe that some discount brokers do not as well if I am not mistaken.


The BMO REIT ETF is not yet listed on BMO's DRIP plan documents. However, because it is only a few months old, its first distribution is not until September. I will probably know better by then what options are available to me.


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## furgy (Apr 20, 2009)

REITs will pay distributions , not exactly the same as dividends , so will REIT funds.

In the case of individual REITs , some will give you an extra 1 or 2% if you DRIP rather than take the cash , that makes it even more worthwhile to DRIP.


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## Belguy (May 24, 2010)

For those who may be interested, here is an article from the Globe and Mail's Rob Carrick concerning Canadian dividend ETF's:

http://www.theglobeandmail.com/glob...k-of-making-bad-stock-choices/article1680597/

And, for comparison purposes, how some of the big bank run funds, including dividend funds, have performed:

http://www.theglobeandmail.com/glob...six-bank-stock-fund-offerings/article1674059/

Any thoughts?


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## alphatrader2000 (Aug 18, 2010)

garcanfin said:


> Hi, I am a newbie just recently started experimenting with stocks trading via TD Waterhouse. Just wondering for companies that pay dividends (e.g. SunLife etc.), under what conditions will I receive any form of dividends, and in what ways. Thanks.



There are 3 dates that you have be know:

Dividend Date: If you hold the stock on this date and prior then you are entitled.
X-Dividend Date: If you buy the stock PRIOR to this date you are entitled
Pay date: If you are entitled then this is the date you get paid.

For a stock that settles in 3 business dates (i.e. 99% of stocks) X-Dividend Date is usually 2 business date before the dividend date.


Also, for a good portion of blue cheaps, you may get your dividend not only in form of cash but in form of stocks. It is called dividend reinvestment plan.

I hope this helps.


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## Bobster (Sep 14, 2010)

*dividend payments*

I bought BCE on Sept 8. The x-dividend date was Sept 13. Settlement date with Direct Investing was Sept 13. I believe the record date is Sept 15 and the payment date is Oct 15.

Am I entitled to this dividend?

Thanks


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## Coach (Aug 11, 2010)

Yes. You will receive the dividend in your account on Oct 18th (due to the weekend).

Since you bought the dividend on or before the ex-dividend date, you are entitled to receive the dividend.

On the ex dividend date you can typically expect high dividend paying stocks like BCE to drop in price by the amount of the upcoming dividend. Many people like to capture the dividend before they choose to sell a security.


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## patmanz (Jul 26, 2010)

quick one folks:

suppose a stock/etf pay his dividends the 15th of each month.

do an investor need to hold the stock/etf for the entire period ? what if the stock is purchased the 14 ? a day before the dividend is distributed ? will the distribution be 'adjusted' for the holding period ???


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## Financial Cents (Jul 22, 2010)

Absolutely (unless the cash is important) I don't see a reason why you wouldn't setup the DRIP.


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## Cal (Jun 17, 2009)

patzman...see alphatraders post above.


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## bean438 (Jul 18, 2009)

Cal said:


> Bean - Investorline must be different. Even the banks pass on the drip discounts, you just have to ask them to, and it is done no problem.


Well that is news to me. Most companies that I have driped only allowed drips if you hold the certificate in your name.

I am talking about a pure DRIP, not a "synthetic" drip offered by all brokers.

Most CDN online brokers allow synthetic drips for CDN companies only.


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## Cal (Jun 17, 2009)

Bean the point mentioned above was about the discounts. The banks will pass these discounts on with their synthetic drips. You just have to mention it. Then once the shares are dripped by the bank, you can go on the company website and double check that you received the discounted share price, some companies that offer a discount will show the difference on their websites, line REIT.UN (https://riocan.com/_bin/distributions/purchasePrice.cfm).

As per the actual dripping of shares. You are right. The banks will only do a synthetic drip (whole shares). And you obviously must have enough shares to have enough of a dividend payment to receive at least 1 whole share.

You have to get the share certificate to do a traditional drip to get fractional shares as well.


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## patmanz (Jul 26, 2010)

Where can i get the x-dividend date for the ishares XRE ???

I purchased on 15 september and i want to know if i will get the next dividends


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## furgy (Apr 20, 2009)

Go here:

http://ca.ishares.com/publish/conte...ads/reports/2010_Distribution_Schedule_EN.pdf

You should get your monthly distribution on the 30th of Sept.


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## CanadianCapitalist (Mar 31, 2009)

patmanz said:


> Where can i get the x-dividend date for the ishares XRE ???
> 
> I purchased on 15 september and i want to know if i will get the next dividends


Yes, you will. 

http://tmx.quotemedia.com/article.php?newsid=34111988&qm_symbol=XRE



> Unitholders of record on September 29, 2010 will receive cash distributions payable on September 30, 2010.


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## bean438 (Jul 18, 2009)

Cal said:


> Bean the point mentioned above was about the discounts. The banks will pass these discounts on with their synthetic drips. You just have to mention it. Then once the shares are dripped by the bank, you can go on the company website and double check that you received the discounted share price, some companies that offer a discount will show the difference on their websites, line REIT.UN (https://riocan.com/_bin/distributions/purchasePrice.cfm).
> 
> As per the actual dripping of shares. You are right. The banks will only do a synthetic drip (whole shares). And you obviously must have enough shares to have enough of a dividend payment to receive at least 1 whole share.
> 
> You have to get the share certificate to do a traditional drip to get fractional shares as well.



Interesting. I was under the impression that to receive the discount you had to belong to the company's DRIP.

I'll have to look into this further.


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## patmanz (Jul 26, 2010)

CanadianCapitalist said:


> Yes, you will.
> 
> http://tmx.quotemedia.com/article.php?newsid=34111988&qm_symbol=XRE


I did not receive the XRE dividends 

How dividends usually paid, close of the market, next day ?


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## Larry6417 (Jan 27, 2010)

It can take a month (sometimes more) to receive the distributions after the ex-dividend date. The broker should know the payment date.


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## humble_pie (Jun 7, 2009)

my understanding is that the CDS system delivers a dollar amount representing the aggregate number of dividends to each broker in advance of the payable date. It's up to each brokerage house to distribute the dividend amounts correctly to their clients who are the beneficial owners of the stock.

some brokers get this job done by the morning of the payable date. Other brokers don't show dividends in clients' accounts until the following day, but the entries will be back-dated. I have accounts at both types of brokers. To me it's not an issue, but if a client is truly unhappy with the day-later method, there's probably no use complaining. It would be better to change brokers.


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