Any good value shares currently paying a divi?

[johnfm]

Noice in the motleyfool a share (BP I think) now paying a 9.4% yield on the 404p share price.

Any 'cheap' shares still paying a divi a the moment?

[ipitythefool]

Lots of firms will cut dividends this year though.

I expect BP to do so likelwise - especially if oil remains in the £40-$50 level.


There are some defensives that look good for yield right now though: BT, United Utilities

[Fittster]

Might be out of date:

LEGAL AND GENERAL 22.3%
LLOYDS BANKING 21.2%
MAN GROUP 20.0%
AVIVA 17.9%
BARCLAYS 15.1%
LAND SECURITIES 14.3%
KAZAKHMYS 14.2%
HSBC HOLDINGS 13.7%
OLD MUTUAL 11.6%
BT GROUP 10.3%

[MitchT]

If a share is yielding, say, 5%, and you have £10,000 worth of that share, then I guess I'm right in saying that you'll receive £500 in dividends. However, do you have to hold the shares for a certain amount of time to receive the full dividend?

For example. If I were to buy a share just before it went 'ex-dividend' and then sell it as soon as the dividend had been paid, and then repeat with another share, then another, etc. would I make a fortune in dividends over the course of a year or are shares that you've only held for a short time subject to a proportionately reduced dividend?

[MitchT]

haworthlloyd1 said:

normally the price of the share is adjusted to account for this.

In what way? Surely You buy a share at the quoted 'buy' price and sell it at the quoted 'sell' price, so unless the shares fall in value you're going to sell them for roughly what you paid for them, less any broker's commission and bid/offer spread... And if shares were 100% guaranteed to fall between the 'ex-dividend' date and the date on which the dividends were actually paid then a short position with a spread-betting company would enable you to hedge against that... in fact, if this was guaranteed to happen then traders would 'short' stock during this phase as a matter of course.

Edited by MitchT on Friday 6th March 13:39

[ipitythefool]

MitchT said:

haworthlloyd1 said:

normally the price of the share is adjusted to account for this.

In what way? Surely You buy a share at the quoted 'buy' price and sell it at the quoted 'sell' price, so unless the shares fall in value you're going to sell them for roughly what you paid for them, less any broker's commission and bid/offer spread... And if shares were 100% guaranteed to fall between the 'ex-dividend' date and the date on which the dividends were actually paid then a short position with a spread-betting company would enable you to hedge against that... in fact, if this was guaranteed to happen then traders would 'short' stock during this phase as a matter of course.

Edited by MitchT on Friday 6th March 13:39

Share prices almost always fall on the day they go 'ex-divi'.

Usually they fall more than the amount of the divi in fact.
I've sometimes made more buy buying on the day they've gone 'ex-divi'.


For example share price of 100p and a 6p divi. The share 'should' fall to about 94p, but often they'll overshoot and go to 91/92 and so there's a good bargain.

[MitchT]

ipitythefool said:

Share prices almost always fall on the day they go 'ex-divi'.

Usually they fall more than the amount of the divi in fact.
I've sometimes made more buy buying on the day they've gone 'ex-divi'.


For example share price of 100p and a 6p divi. The share 'should' fall to about 94p, but often they'll overshoot and go to 91/92 and so there's a good bargain.

Thanks, that's interesting. I'll have a careful look through my charts for various shares and see if there's a repetitive pattern. It could be that a short just before ex-divi and then a long after could be a nice little earner!

[MitchT]

haworthlloyd1 said:

as for going short i don't think it would work if you look at the spreads etc it wouldn't make sense

Depends how much the price moves. If the yield on a share is 5% and the share falls by that much when it's gone ex-div then I would imagine it's worth it. Still, I'll look into it. I'll watch as a few shares go ex-div and see how much the price changes and if the spread widens to reflect the volatility.