In theory Ex and cum produce identical returns- i.e. when a stock goes Ex divvy it falls by the value of the dividend. But then that is the ideal / efficient market behaviour - which does not take into account dividend preferences.
The key downside risk is this: Telstra is a yield stock whose shareholders strongly prefer dividends to capital gains. Telstra has additionally run up well to the Ex date ($2.55 to $3.40). It is likely that a large number of fundies are hanging on to take the divvy and then sell at a capital gain. That would cause Telstra to fall by more than the divvy. [i.e. it is probably a good idea to sell now or be exposed to a short term loss - but over the long term TLS is a BUY!]
Since those same fundies prefer dividends they are likely to jump back in at some point probably in 3 to 4 months to build a stake prior to the next dividend.
The winning strategy could be to be contrarian, avoid the dividends and buy Telstra Ex Div. Doing so MAY get you Telstra a point or so cheaper due to dividend preferences driving valuation, but then dividend preference arbitrage is closely watched and priced out.
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Last
$3.88 |
Change
0.000(0.00%) |
Mkt cap ! $44.83B |
Open | High | Low | Value | Volume |
$3.87 | $3.91 | $3.86 | $69.78M | 18.08M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 66211 | $3.88 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$3.89 | 400250 | 3 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 66211 | 3.880 |
21 | 306612 | 3.870 |
24 | 408355 | 3.860 |
23 | 178706 | 3.850 |
16 | 192859 | 3.840 |
Price($) | Vol. | No. |
---|---|---|
3.890 | 170000 | 1 |
3.900 | 388000 | 32 |
3.910 | 852417 | 69 |
3.920 | 320292 | 39 |
3.930 | 294080 | 32 |
Last trade - 16.10pm 19/07/2024 (20 minute delay) ? |
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