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James Dennin, Kapitall: Dividend payouts are one way larger companies reward their shareholders, and signal that the corporation itselt is in good standing. Profits, earnings, or extra stock gets paid out to all of the people who bought shares in the company before the
record date, the final day that you can purchase the stock and still qualify for dividend payments. The
ex-dividend date, referred to by insiders simply as the
ex-date is the date on which these dividends are paid out.
[Read more from Kapitall: Top 20 Picks from a Value-Oriented Fund]
To find income oppportunities, we ran a screen for all US-traded common stocks who are issuing dividend payments before the end of August. To narrow our list we looked for indicators of
institutional buying by screening for stocks that experienced significant net institutional purchases over the last quarter representing at least 5% of share float. This indicates that institutional investors such as hedge fund managers and mutual fund managers expect these stocks to outperform in the future.
However, it's important to remember that dividend payments are usually made by larger, more established companies. To profit off of a dividend payment, you must have the stock in your portfolio before the record date. Otherwise, you've just bought a potentially expensive stock that is unlikely to grow in value very much. Smaller companies, and high-growth companies don't usually issue dividends, because they are reinvesting profits heavily to maintain that high growth.
Click on the image below to see analyst ratings over time.Dig Deeper: Compare analyst ratings to annual returns for stocks mentioned.
Do approaching ex-dividend dates make these stocks worthwhile investments? Use the list below as a starting point for your own analysis: