Dividend Watch: 3 Stocks Going Ex-Dividend Monday: CODI, PIR, ACE

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Monday, Monday, July 21, 2014, 4:00 AM ET, 7 U.S. common stocks are scheduled to go ex-dividend. The dividend yields on these stocks range from 1% to 8.2%. All of these stocks can be found on our stocks going ex-dividend section of our dividend calendar.

Highlighted Stocks Going Ex-Dividend Monday:

Compass Diversified Holdings

Owners of Compass Diversified Holdings (NYSE: CODI) shares, as of market close today, will be eligible for a dividend of 36 cents per share. At a price of $18.44 as of 9:42 a.m. ET, the dividend yield is 7.7%.

The average volume for Compass Diversified Holdings has been 104,100 shares per day over the past 30 days. Compass Diversified Holdings has a market cap of $900.8 million and is part of the conglomerates industry. Shares are down 5.9% year-to-date as of the close of trading on Thursday.

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

Compass Diversified Holdings is a private equity firm specializing in acquisitions, buyouts, and middle market investments. It seeks to invest in manufacturing, distribution, consumer products, and business services sectors. The firm prefers to invest in companies based in North America. The company has a P/E ratio of 16.95.

TheStreet Ratings rates Compass Diversified Holdings as a buy. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, compelling growth in net income, revenue growth, notable return on equity and reasonable valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins. You can view the full Compass Diversified Holdings Ratings Report now.

Pier 1 Imports

Owners of Pier 1 Imports (NYSE: PIR) shares, as of market close today, will be eligible for a dividend of 6 cents per share. At a price of $15.54 as of 9:46 a.m. ET, the dividend yield is 1.6%.

The average volume for Pier 1 Imports has been 2.1 million shares per day over the past 30 days. Pier 1 Imports has a market cap of $1.4 billion and is part of the retail industry. Shares are down 33.4% year-to-date as of the close of trading on Thursday.

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

Pier 1 Imports, Inc. is engaged in the retail sale of decorative home furnishings, furniture, gifts, and related products. The company has a P/E ratio of 15.74.

TheStreet Ratings rates Pier 1 Imports as a hold. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself. You can view the full Pier 1 Imports Ratings Report now.

ACE

Owners of ACE (NYSE: ACE) shares, as of market close today, will be eligible for a dividend of 65 cents per share. At a price of $103.34 as of 9:46 a.m. ET, the dividend yield is 2.5%.

The average volume for ACE has been 983,500 shares per day over the past 30 days. ACE has a market cap of $35.3 billion and is part of the insurance industry. Shares are up 1.1% year-to-date as of the close of trading on Thursday.

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

ACE Limited, through its subsidiaries, provides a range of insurance and reinsurance products to insureds worldwide. The company has a P/E ratio of 10.17.

TheStreet Ratings rates ACE as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income. You can view the full ACE 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.

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