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Question:
I
bought some shares of a stock not too long ago, but
it seems that I'm not receiving the dividend. Can
you tell me what's happened?
Maylou
Schmidt
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Answer:
Dear Maylou,
There
are several possibilities. Given that you didn't mention
the specific stock, you will have to decide which
is the likely answer.
Possibility
#1. You may have purchased the stock when it was
"ex-dividend." This phrase literally means "without
a dividend." Any dividend-paying stock purchased during
the ex-dividend period will not pay a previously declared
dividend to its new owner.
Usually
stocks go ex-dividend on the date of record, which
is several days before the date on which the payment
is actually made. If you own a stock on the date of
record you will receive the dividend. But if you buy
the stock during the ex-dividend period, you will
not receive the dividend.
A
stock trading ex-dividend has the letter "x" next
to its listing in the newspaper or online.
If
your stock was ex-dividend, never fear. You will receive
the next declared dividend because at that time you
will be what is officially known as a "shareholder
of record." Most likely you will have a three-month
wait given that the majority of dividends are paid
out on a quarterly basis.
Possibility
#2. If you signed up for the company's automatic
dividend reinvestment plan, then you may not have
noticed the fact that dividends have indeed been paid
out. With this particular plan, all dividends are
automatically used to purchase additional shares of
the same stock.
The
information about dividend reinvestments should appear
on your monthly statement.
Possibility
#3. The company's board of directors may have
decided to cancel a dividend, perhaps because the
firm was less profitable during the last quarter or
for an even longer period of time. You can find out
by contacting the investor relations division of the
company. If you do not have the company's phone number,
you can type in the full name of the company on any
search engine. After you locate the company's Web
site and you can do one of two things -- search for
the dividend information online or note the telephone
number for the company's headquarters and call them.
Good
luck!
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