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Started By
Message
XOM dividend almost 10% now
Posted on 3/13/20 at 12:05 pm
Posted on 3/13/20 at 12:05 pm
Honestly this is getting crazy. Seems like a no brainer at these levels but it won’t stop dropping.
5
Posted on 3/13/20 at 12:09 pm to Desert King
The stock is down about 50% since the beginning of the year.
Posted on 3/13/20 at 12:11 pm to Desert King
So I don't have a clue how this works although I inherited Exxon stock years ago.
If the price of a stock is tanking and they still have to operate, how does the dividend go up? It just sounds counterintuitive. I get that it might entice people to buy it but other than that I don't get it.
If the price of a stock is tanking and they still have to operate, how does the dividend go up? It just sounds counterintuitive. I get that it might entice people to buy it but other than that I don't get it.
Posted on 3/13/20 at 12:13 pm to tiger91
I believe what he is saying is with dividend payments being $0.87 quarterly per share, the lower the share price, the higher the return on your dividend is.
EX: At $87/share = $3.48 yearly =~4%
At $37/share = $3.48 yearly =~9.4%
EX: At $87/share = $3.48 yearly =~4%
At $37/share = $3.48 yearly =~9.4%
This post was edited on 3/13/20 at 12:15 pm
Posted on 3/13/20 at 12:15 pm to Pintail
If you already own the stock, your yield is based on what you paid per share. Doesn’t matter what it’s trading at now.
A 10% dividend for almost any company is abnormal and a sign that the dividend could be in trouble.
A 10% dividend for almost any company is abnormal and a sign that the dividend could be in trouble.
Posted on 3/13/20 at 12:21 pm to 632627
quote:
If you already own the stock, your yield is based on what you paid per share. Doesn’t matter what it’s trading at now.
Correct me if I am wrong, but it would still matter.
Take this for example;
EX: At $87/share = $3.48 yearly =~4%
At $37/share = $3.48 yearly =~9.4%
Buy 100 shares at $37 = $3700 making $348 yearly. The stock price jumps to $87 and now you have $8700 tied up only making $348.
Posted on 3/13/20 at 12:22 pm to tiger91
quote:
If the price of a stock is tanking and they still have to operate, how does the dividend go up? It just sounds counterintuitive. I get that it might entice people to buy it but other than that I don't get it.
The dividend payment is fixed (for now anyway). The lower the price you pay per share, your dividend yield goes up. If you buy XOM at the current price, that yield is almost 10%.
Posted on 3/13/20 at 12:24 pm to 632627
Exactly. If you bought XOM in the $50s, you’re still personally only yielding 6% or so, depending on what you paid.
Posted on 3/13/20 at 12:24 pm to tiger91
quote:
If the price of a stock is tanking and they still have to operate, how does the dividend go up?
I'll say it another way. The dividend payments are fixed. They don't move.
The price per share of the stock is always moving, therefore the yield (%) from the dividend is always moving.
If a $20 stock pays out $1/share in annual dividends (.25 per quarter) then you're looking at a 5% dividend yield.
If that stock loses half its value to $10/share the dividend will double. It's now a 10% yield, but payments have remained the same.
If it goes back to $15/share, the dividend would be 7.5%
If the stock doubled to $40 from $20, the dividend yield would be half of the original. From 5 to 2.5%
Posted on 3/13/20 at 12:24 pm to Pintail
quote:
Buy 100 shares at $37 = $3700 making $348 yearly. The stock price jumps to $87 and now you have $8700 tied up only making $348.
You don't have $8,700 tied up - you still only paid $3,700 regardless of what the price does after that.
Posted on 3/13/20 at 12:27 pm to Pintail
quote:At that point you're a hell of a lot happier with the capital appreciation than any short term dividend will ever give you.
Buy 100 shares at $37 = $3700 making $348 yearly. The stock price jumps to $87 and now you have $8700 tied up only making $348.
This post was edited on 3/13/20 at 12:28 pm
Posted on 3/13/20 at 12:28 pm to Brummy
You do have $8700 that you could take out and move correct? So that $8700 is tied up only making a 4% return. You aren't making a 9.4% return like you were before.
Imagine a savings account that only gives you returns on your initial investment. That would essentially be your scenario.
Imagine a savings account that only gives you returns on your initial investment. That would essentially be your scenario.
This post was edited on 3/13/20 at 12:33 pm
Posted on 3/13/20 at 12:29 pm to bayoubengals88
quote:
At that point you're a hell of a lot happier with the capital appreciation than any short term dividend will ever give you.
Well yea, I'm not arguing that.
Posted on 3/13/20 at 12:32 pm to Pintail
quote:
Buy 100 shares at $37 = $3700 making $348 yearly. The stock price jumps to $87 and now you have $8700 tied up only making $348.
The yield is based off the number of shares you own and the original purchase price.
100 shares at $70 = $7000
Dividend = $3.48
Yield = 5%
If the price drops to $35, your 100 shares are now worth only $3500 but your dividend yield does not change. It’s still 5% of the original amount.
But for new buyers at $35, the yield has doubled to 10%.
Posted on 3/13/20 at 12:32 pm to Desert King
For someone how knows nothing about dividends, do you have to own a share for an entire quarter before receiving it? Or if you bought it at the end of the quarter would You still receive the whole dividend?
This post was edited on 3/13/20 at 12:34 pm
Posted on 3/13/20 at 12:35 pm to SPEEDY
quote:
For someone how knows nothing about dividend payments, do you have to own a share for an entire quarter before receiving it? Or if you bought it at the end of the quarter you would still receive the whole dividend?
As long as you own the stock before its ex-dividend date, you will get the full quarterly dividend.
Posted on 3/13/20 at 12:36 pm to Brummy
quote:
You don't have $8,700 tied up - you still only paid $3,700 regardless of what the price does after that.
So would you put your money in a savings account that only pays you interest on the initial deposit? Then leave that money in for years?
What if the stock price jumps to $8700 and now you have $870,000 in the market making only $348 per year?
Posted on 3/13/20 at 12:38 pm to SPEEDY
There are dates by which you must purchase for each company. It's called the ex dividend date.
Look at THIS.
They declare the dividend amount.
They record who gets the dividend.
They pay the dividend.
This process repeats every quarter.
Look at THIS.
They declare the dividend amount.
They record who gets the dividend.
They pay the dividend.
This process repeats every quarter.
This post was edited on 3/13/20 at 12:39 pm
Posted on 3/13/20 at 12:43 pm to Pintail
quote:
What if the stock price jumps to $8700 and now you have $870,000 in the market making only $348 per year?
You’re combining two different things. Only thing relevant to a dividend payment is the number of shares you own. The price of the stock at that moment is irrelevant. The company is distributing a portion of its earnings to shareholders, and that amount is multiplied by the number of slices of the pie you own. That’s it.
This post was edited on 3/13/20 at 12:46 pm
Posted on 3/13/20 at 12:43 pm to bayoubengals88
Thanks for the link!
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