Some Stocks Are About to Go Ex-Dividend. Here Are Some to Consider Buying.
Posted by Daren Fonda on Tuesday, August 27, 2019 Under: 848FINACE
Some Stocks Are About to Go Ex-Dividend. Here Are Some to Consider Buying. -- Barrons.com
12:48 PM ET 8/27/19 | Dow Jones
By Daren Fonda
Whether the market hits another rough patch next week, there's one thing that is certain: Investors who buy a stock just before it goes ex-dividend are entitled to the next payout.
Bespoke Investment Group compiled a list of 19 stocks in the S&P 1500 that are going ex-dividend on Monday. Buying shares before the market close on Friday entitles the purchaser to the next dividend payment.
Keep in mind that a single dividend payment isn't a great reason to buy a stock; if the underlying business is ailing, that payout may not be large enough to offset declines in the share price.
Some of the bigger names going ex-dividend are Alaska Air Group(ticker: ALK), Moody's (MCO), Prudential Financial (PRU), Phillips 66 (PSX), and Walgreens Boots Alliance (WBA). Alaska yields 2.3%, Moody's 0.9%, Prudential 4.9%, Phillips 3.7%, and Walgreens 3.6%.
A handful of stocks going ex-dividend yield much more than those payouts. New Media Investment Group (NEWM), for instance, yields 18.1%, based on its scheduled quarterly payout of 38 cents. New Media is a newspaper and digital-media holding company that recently announced a deal to acquire Gannett, including USA Today and more than 160 brands in the U.K. The deal may well be a winner for shareholders, but New Media stock hasn't done well: It's down 23% this year, including dividends, and it's delivered a negative total return of 42% over the last 52 weeks.
One high-yield stock that looks less risky is Sabra Healthcare REIT (SBRA). It's a real-estate investment trust yielding 8.5%. The company owns skilled-nursing facilities and other health-care properties. The stock is up 34.3% this year, including dividends. The company has been reducing its tenant concentration and improving its debt profile, boosting operating results and net income.
Granted, some of the lowest-yielding stocks going ex-dividend have been some of the strongest performers this year. Cable One (CABO) goes ex-dividend Monday with an annualized yield of just 0.72%. The stock has gained 53.6% this year, however, including dividends. The company is a rural cable and broadband provider with 800,000 customers in 21 states, and it appears to be doing well. Revenue increased to $1.07 billion in 2018 from $820 million in 2016, and adjusted Ebitda (earnings before interest, taxes, depreciation, and amortization) rose to $501 million from $357 million. The firm recently hiked its quarterly payout by 25 cents to $2.25 a share.
Carlisle stock (CSL) -- going ex-dividend on Monday with a 1.4% annualized yield -- has also been a winner. Carlisle is a diversified manufacturer with rising revenue and profit; analysts expect sales to reach $4.8 billion this year, from $4.5 billion in 2018, with earnings per share of $8.14, up from $6.22. The stock, including dividends, is up 40.2% this year -- a sign that a modest dividend is gravy when the overall business is on a roll.
Write to Daren Fonda at daren.fonda@barrons.com
> Dow Jones Newswires
August 16, 2019 12:48 ET (16:48 GMT)
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