CCL stock/dividends question

[oratheeexplorer]

We just purchased 100 shares of CCL stock on April 12th. I was on the Carnival Corporation website and it says there was a dividend declared on April 11th, which is payable June 15. Since this was declared on April 11th, and we purchased on the 12th, we won't get this dividend, correct?

 

Also, do most of you have the dividends re-invested? What are the options for what to do with them? Do we have to let them know what to do or is there an automatic plan?

 

Thanks for any information.....

[Pam in CA]

We just purchased 100 shares of CCL stock on April 12th. I was on the Carnival Corporation website and it says there was a dividend declared on April 11th, which is payable June 15. Since this was declared on April 11th, and we purchased on the 12th, we won't get this dividend, correct?

 

Also, do most of you have the dividends re-invested? What are the options for what to do with them? Do we have to let them know what to do or is there an automatic plan?

 

Thanks for any information.....

I just re-read the announcement and the dividend is payable for stock purchased by May 25th. So, you will get the dividend of $.25/share.

 

I take the dividend rather than re-invest it since I only need 100 shares and I purchased the stock to get the shareholder benefit rather than as a true investment. If you choose to take the dividend, it'll be automatically sent to the account name and address on record.

[oratheeexplorer]

I just re-read the announcement and the dividend is payable for stock purchased by May 25th. So, you will get the dividend of $.25/share.

 

I take the dividend rather than re-invest it since I only need 100 shares and I purchased the stock to get the shareholder benefit rather than as a true investment. If you choose to take the dividend, it'll be automatically sent to the account name and address on record.

 

Thanks for the quick reply, Pam! Do we have to tell them what we want done with the dividends?

[Grego]

Thanks for the quick reply, Pam! Do we have to tell them what we want done with the dividends?

 

If the stocks were purchased on your own and not part of an IRA the dividend will be sent to you. If you only purchased 100 shares there isn't enough in dividends to purchase another share.

 

Welcome to the Carnival Corp family of shareholders.

[oratheeexplorer]

If the stocks were purchased on your own and not part of an IRA the dividend will be sent to you. If you only purchased 100 shares there isn't enough in dividends to purchase another share.

 

Welcome to the Carnival Corp family of shareholders.

 

Thanks! Actually, my husband purchased them through a Roth IRA he just opened. So will the dividends be mailed to him?

[Astro Flyer]

Having purchased the CCL's shares only last summer through a brokerage firm it must have been set up by default to reinvest the dividends in additional CCL shares or I missed that option when purchasing them. I have left it that way instead of having the dividend sent to me quarterly but that's just me.

[Astro Flyer]

If the stocks were purchased on your own and not part of an IRA the dividend will be sent to you. If you only purchased 100 shares there isn't enough in dividends to purchase another share.

 

Welcome to the Carnival Corp family of shareholders.

I'm new at this however the approximately $25 quarterly dividend for my 100 shares has purchased a percentage of a share each quarter increasing my shares.

 

Obviously there's no additional OBC benefits however I allow my dividend to purchase additional shares for when I eventually sell them decades from now instead of getting a cash dividend.

 

Whether this is a wise decision for me or not...only time will tell. ;)

[0bnxshs]

I'm new at this however the approximately $25 quarterly dividend for my 100 shares has purchased a percentage of a share each quarter increasing my shares.

 

Obviously there's no additional OBC benefits however I allow my dividend to purchase additional shares for when I eventually sell them decades from now instead of getting a cash dividend.

 

Whether this is a wise decision for me or not...only time will tell. ;)

 

First, the brokerage handling your husband's Roth IRA may indeed reinvest the dividend and purchase fractional shares for the account; it all depends on how the account was set up. There are pros and cons as to whether this is a good use of the dividend and it varies depending on your personal financial situation and goals. What is good for you may not be good for me.

 

Secondly, the ex-dividend date will be 23 May, based on a record date of 25 May. So, generally this means you'll want to initiate the purchase by the 23rd so that it is "settled" by the 25th so that you'll have "shares of record" on the 25th. Purchasing after the 23rd won't guarantee you'll be a "shareholder of record" by the 25th as brokerages need time to "settle" their transactions and this used to take 2 days, hence the 2 day "settlement time-frame".

 

I assume you know that owning a minimum of 100 shares of CCL makes you eligible for a "Shareholder Benefit" of OBCs on all Carnival owned cruise lines, the benefit amount being based on the length of the cruise. There's no additional benefit for owning more than 100 shares. Clicking here will take you to the Carnival page describing the benefit and how to claim it.

 

Cheers!

[oratheeexplorer]

First, the brokerage handling your husband's Roth IRA may indeed reinvest the dividend and purchase fractional shares for the account; it all depends on how the account was set up. There are pros and cons as to whether this is a good use of the dividend and it varies depending on your personal financial situation and goals. What is good for you may not be good for me.

 

Secondly, the ex-dividend date will be 23 May, based on a record date of 25 May. So, generally this means you'll want to initiate the purchase by the 23rd so that it is "settled" by the 25th so that you'll have "shares of record" on the 25th. Purchasing after the 23rd won't guarantee you'll be a "shareholder of record" by the 25th as brokerages need time to "settle" their transactions and this used to take 2 days, hence the 2 day "settlement time-frame".

 

I assume you know that owning a minimum of 100 shares of CCL makes you eligible for a "Shareholder Benefit" of OBCs on all Carnival owned cruise lines, the benefit amount being based on the length of the cruise. There's no additional benefit for owning more than 100 shares. Clicking here will take you to the Carnival page describing the benefit and how to claim it.

 

Cheers!

 

 

He actually purchased the shares on April 12th. We know about the shareholder OBC benefits, that's why he purchased them.....thanks for the info....I will have him check and see how his is set up for the dividends....I think he should just have them sent to him, but I will see what he thinks. Thanks again....

[cherylandtk]

Thanks! Actually, my husband purchased them through a Roth IRA he just opened. So will the dividends be mailed to him?

If it is part of his Roth IRA the earnings have to remain in the account for at least five years and until he starts taking his distributions at age 59 1/2 or more. He would have to file with the account trustee for a distribution.

[2pbears]

I think he should just have them sent to him, but I will see what he thinks. Thanks again....

 

Your husband should speak with his financial advisor before removing any funds from the Roth IRA.

[srpilo]

If the stocks were purchased on your own and not part of an IRA the dividend will be sent to you. If you only purchased 100 shares there isn't enough in dividends to purchase another share.

 

Welcome to the Carnival Corp family of shareholders.

 

Actually our CCL divden goes directly into stock/trading cash account, I've never had one sent directly to me.

 

 

Of course everyones experiences vary

Srpilo

[Whoo]

Actually our CCL divden goes directly into stock/trading cash account, I've never had one sent directly to me.

 

 

Of course everyones experiences vary

Srpilo

 

This is what happened with my very first dividend that I just received. I thought it would be used to invest in more shares (a fraction of a share), but it shows up in a cash account with the brokerage. I can leave it there to use to purchase stock, or call and have a check mailed to me.

[denmarks]

I use eTrade and by default it goes into the cash account. I just click on the link to send it to my bank and I have it in a couple of days.

[catlady1]

First, the brokerage handling your husband's Roth IRA may indeed reinvest the dividend and purchase fractional shares for the account; it all depends on how the account was set up. There are pros and cons as to whether this is a good use of the dividend and it varies depending on your personal financial situation and goals. What is good for you may not be good for me.

 

Secondly, the ex-dividend date will be 23 May, based on a record date of 25 May. So, generally this means you'll want to initiate the purchase by the 23rd so that it is "settled" by the 25th so that you'll have "shares of record" on the 25th. Purchasing after the 23rd won't guarantee you'll be a "shareholder of record" by the 25th as brokerages need time to "settle" their transactions and this used to take 2 days, hence the 2 day "settlement time-frame".

 

I assume you know that owning a minimum of 100 shares of CCL makes you eligible for a "Shareholder Benefit" of OBCs on all Carnival owned cruise lines, the benefit amount being based on the length of the cruise. There's no additional benefit for owning more than 100 shares. Clicking here will take you to the Carnival page describing the benefit and how to claim it.

 

Cheers!

 

Hi Rich

The ex date is the date without the dividend. The settlement date doesn't come into play. The pay date is the date that it is credited to the account. The price of a stock is reduced by the amount of the dividend on the ex day. If a stock closes at $10 a share and goes ex the next day and pays a $1 dividend. If it opens at $9 it's called unchanged.

Good luck.

Mike

[Loonbeam]

Um. No. Dividends do not in any way affect the value or pricing of a stock. Stock share prices are set by the market only.

 

Mutual funds are a different story, in that case dividend and capital gains can affect the value of shares.

 

What you can see is a small run up of the stock prior to the ex date and small drop thereafter as certain investor types 'chase' the dividends for tax and other purposes.

 

Hi Rich

The ex date is the date without the dividend. The settlement date doesn't come into play. The pay date is the date that it is credited to the account. The price of a stock is reduced by the amount of the dividend on the ex day. If a stock closes at $10 a share and goes ex the next day and pays a $1 dividend. If it opens at $9 it's called unchanged.

Good luck.

Mike

[caribill]

Um. No. Dividends do not in any way affect the value or pricing of a stock. Stock share prices are set by the market only.

 

 

Yes, when a stock goes ex-dividend, its value is reduced by the amount of the dividend.

 

Then the market takes over and the price will fluctuate from there.

 

Example: Stock closes at $30.25 and goes ex-dividend the next day and closes that day at $30.50.

 

Stock will be considered as having a previous closing price of $30.00 and to have gained $.50 when it closes at $30.50.

[caribill]

The settlement date doesn't come into play.

 

The dividend is paid to people with record of owndership by the close of business on May 25.

 

Therefore, you must have paid for the stock (settlement date) by that time.

[0bnxshs]

Yes, when a stock goes ex-dividend, its value is reduced by the amount of the dividend.

 

Then the market takes over and the price will fluctuate from there.

 

Example: Stock closes at $30.25 and goes ex-dividend the next day and closes that day at $30.50.

 

Stock will be considered as having a previous closing price of $30.00 and to have gained $.50 when it closes at $30.50.

 

That's a consequence of the cash dividend itself (paying cash out of a company's cash holdings reduces the value of the company) and not the reason for the ex-dividend date. The ex-dividend date exists so that trades of stock can be settled (paid for) by the record date. See this for a better explanation.

[Loonbeam]

I did a little research. Unfortunately with after hours trading its almost impossible to document specifics to CCL but I found this helpful article:

 

http://seekingalpha.com/article/201688-do-dividend-payouts-reduce-share-prices

 

Dividend payouts do reduce pending orders and have impact on options and book value (which is also calculated per share and what I think you are thinking of), but generally NOT share price.

 

Yes, when a stock goes ex-dividend, its value is reduced by the amount of the dividend.

 

Then the market takes over and the price will fluctuate from there.

 

Example: Stock closes at $30.25 and goes ex-dividend the next day and closes that day at $30.50.

 

Stock will be considered as having a previous closing price of $30.00 and to have gained $.50 when it closes at $30.50.

[catlady1]

I did a little research. Unfortunately with after hours trading its almost impossible to document specifics to CCL but I found this helpful article:

 

http://seekingalpha.com/article/201688-do-dividend-payouts-reduce-share-prices

 

Dividend payouts do reduce pending orders and have impact on options and book value (which is also calculated per share and what I think you are thinking of), but generally NOT share price.

 

Loonbeam

Thanks for your input.

I have learned never to try to argue or prove something to someone on an internet forum.

Book value is considered the asset value of a company. It can be a small fraction of the share price or a large multiple of the share price.

As you said the market sets the value of the share price. Some use book value as a metric for investing many don't. On the day a stock goes ex it's price is reduced by the value of the dividend. The market then sets the value of the share price. As Bill and I have said if the stock closed the previous day at $30 and goes ex $1 and closes at $30 it will be reported that it is up $1 that day. The market set the price of 30 but because the stock went ex $1 and the price was reduced by $1 when it closes on the ex day at 30 it's considered up $1. If it closes at $29 it's unchanged for the day.

Good investing to you.

Mike