4 Stocks Going Ex-Dividend Tomorrow: FAF, POM, KSU, TRV

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

Tomorrow, June 6, 2013, 17 U.S. common stocks are scheduled to go ex-dividend. The dividend yields on these stocks range from 0.8% to 5.2%. All of these stocks can be found on our stocks going ex-dividend section of our dividend calendar.

Highlighted Stocks Going Ex-Dividend Tomorrow:

First American Financial

Owners of First American Financial (NYSE: FAF) shares as of market close today will be eligible for a dividend of 12 cents per share. At a price of $23.15 as of 9:35 a.m. ET, the dividend yield is 2%.

The average volume for First American Financial has been 776,500 shares per day over the past 30 days. First American Financial has a market cap of $2.6 billion and is part of the insurance industry. Shares are down 3.7% year to date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

First American Financial Corporation, through its subsidiaries, provides financial services. The company operates in two segments, Title Insurance and Services, and Specialty Insurance. The company has a P/E ratio of 8.43.

TheStreet Ratings rates First American Financial as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, notable return on equity, compelling growth in net income and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins. You can view the full First American Financial Ratings Report now.

Pepco Holdings

Owners of Pepco Holdings (NYSE: POM) shares as of market close today will be eligible for a dividend of 27 cents per share. At a price of $20.62 as of 9:35 a.m. ET, the dividend yield is 5.2%.

The average volume for Pepco Holdings has been 2.1 million shares per day over the past 30 days. Pepco Holdings has a market cap of $5.2 billion and is part of the utilities industry. Shares are up 5.8% year to date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

Pepco Holdings, Inc., through its subsidiaries, engages in the transmission, distribution, and supply of electricity. The company also distributes and supplies natural gas.

TheStreet Ratings rates Pepco Holdings as a buy. Among the primary strengths of the company is its solid stock performance, considering both the consistency and magnitude of the price movement over time. We feel these strengths outweigh the fact that the company has had sub par growth in net income. You can view the full Pepco Holdings Ratings Report now.

Kansas City Southern

Owners of Kansas City Southern (NYSE: KSU) shares as of market close today will be eligible for a dividend of 22 cents per share. At a price of $108.01 as of 9:35 a.m. ET, the dividend yield is 0.8%.

The average volume for Kansas City Southern has been 1.2 million shares per day over the past 30 days. Kansas City Southern has a market cap of $12.1 billion and is part of the transportation industry. Shares are up 30.4% year to date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

Kansas City Southern, through its subsidiaries, engages in the freight rail transportation business. The company has a P/E ratio of 29.72.

TheStreet Ratings rates Kansas City Southern as a buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow. You can view the full Kansas City Southern Ratings Report now.

Travelers Companies

Owners of Travelers Companies (NYSE: TRV) shares as of market close today will be eligible for a dividend of 50 cents per share. At a price of $83.54 as of 9:35 a.m. ET, the dividend yield is 2.4%.

The average volume for Travelers Companies has been 2.0 million shares per day over the past 30 days. Travelers Companies has a market cap of $31.5 billion and is part of the insurance industry. Shares are up 16.7% year to date as of the close of trading on Tuesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

The Travelers Companies, Inc., through its subsidiaries, provides various commercial and personal property and casualty insurance products and services to businesses, government units, associations, and individuals primarily in the United States. The company has a P/E ratio of 12.67.

TheStreet Ratings rates Travelers Companies as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, increase in net income, notable return on equity, attractive valuation levels and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results. You can view the full Travelers Companies Ratings Report now.

More About Dividends:

One benefit of owning a stock is the potential that you will be paid a dividend. The distribution of dividend payments is another way for a company to share its profit with you. A dividend means that the company pays you a certain amount of money, either as a one-time payment or more commonly on a quarterly basis, for each share of stock you own.

Many times, dividends come at the expense of greater price appreciation, because the company is distributing its profits to shareholders rather than reinvesting the profits back into the growth of the company. However, companies that pay dividends can be very attractive to investors when they offer a steady stream of income. There are some important terms and dates an investor should be familiar with before purchasing any dividend-paying companies. Let's work through an example to help better explain some of these terms:

On March 1, ABC Widget Company has decided that because it holds excess cash and lacks investment opportunities, it would like to reward shareholders with a regular quarterly dividend payment. The date for this particular announcement is known as the declaration date. It is on this date that the company announces the specific dividend payment along with the holder of record date (aka record date) and the payment date. The company announces that a dividend payment of 25 cents per share will be payable March 31, 2012 (the payment date) to all shareholders of record at the close of business on March 16, 2012 (holder of record date). What does this all mean? Well the short story is that the company looks at its records on March 16 and anyone listed on the books as an owner of ABC Widget company will be eligible for the dividend payment (on March 31).

The one other important term to remember is the ex-dividend date. The ex-dividend date (typically two trading days before the holder of record date for U.S. securities) is the day in which a company begins trading without the dividend. In order to have a claim on a dividend, shares must be purchased no later than the last business day before the ex-dividend date. A company trading ex-dividend will have the upcoming dividend subtracted from the share price at the start of the trading day. Many times, the price of a stock will increase in anticipation of the upcoming dividend as the ex-dividend date approaches, yet will fall back by the amount of the dividend on the ex-dividend date.

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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