8Lun
I'm sure you mean dividend yield and not yield. But I ask myself the question: what's in it for you? You buy for €1.147 and you receive the dividend of €0.59644. The dividend is deducted from the share price, i.e. the share price is €0.55056 and you have the dividend in your settlement account. Now you could reinvest the money and then collect (more) dividends again.
But the question arises when a company pays out 52% of its profits, what flows into the company? Are they still growing and is this reflected in the share price? The share price would have to rise by more than 100% to compensate for the dividend deduction. And the dividend is not safe, not with anyone.
I would prefer to invest in high-quality dividend growth stocks. You have price appreciation, dividends and dividend growth.
Or why do you think it's a no brainer to pour all your money into it? Completely irrational.
But the question arises when a company pays out 52% of its profits, what flows into the company? Are they still growing and is this reflected in the share price? The share price would have to rise by more than 100% to compensate for the dividend deduction. And the dividend is not safe, not with anyone.
I would prefer to invest in high-quality dividend growth stocks. You have price appreciation, dividends and dividend growth.
Or why do you think it's a no brainer to pour all your money into it? Completely irrational.
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@Joris Share price does not fall to 0.5 Dividends are paid from the company's profit
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•8Lun
@FloShares Of course the price falls 😅 and of course they are paid from the profit, it would be bad if not. What happened on 19.3? Ex Date.
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•@Joris The share price does fall, but for the reason that many sell their shares after the ex-date and there is therefore more supply than demand, and not because the dividend is deducted from the share price
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•8Lun
@FloShares again for you from a reputable source:
https://www.commerzbank.de/investieren/wissen/dividenden-einfach-erklaert/
Definition: What is a dividend?
A stock corporation (AG) receives capital from its shareholders in order to build up, expand or restructure its company. By purchasing one or more shares, the shareholders effectively become co-owners of the company. In return, they receive a share of the profits in the form of dividends, for example.
However, shareholders have no legal claim to the dividend. The Annual General Meeting decides whether and in what amount a dividend is paid. If it approves the payment of a dividend, it is distributed to the shareholders in accordance with the resolution. The dividend is paid out per share certificate, i.e. per share. Payment is usually made in the days following the Annual General Meeting. The share is then quoted "ex-dividend" on one day, i.e. with a dividend discount. This usually reduces the share price by the dividend amount per share.
https://www.commerzbank.de/investieren/wissen/dividenden-einfach-erklaert/
Definition: What is a dividend?
A stock corporation (AG) receives capital from its shareholders in order to build up, expand or restructure its company. By purchasing one or more shares, the shareholders effectively become co-owners of the company. In return, they receive a share of the profits in the form of dividends, for example.
However, shareholders have no legal claim to the dividend. The Annual General Meeting decides whether and in what amount a dividend is paid. If it approves the payment of a dividend, it is distributed to the shareholders in accordance with the resolution. The dividend is paid out per share certificate, i.e. per share. Payment is usually made in the days following the Annual General Meeting. The share is then quoted "ex-dividend" on one day, i.e. with a dividend discount. This usually reduces the share price by the dividend amount per share.
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•@Joris but it also states that the dividend is distributed from the company's profit and not from the share price
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8Lun
@FloShares No, that's not true. The dividend is deducted 1:1 from the share price.
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8Lun
@FloShares then unfortunately you have not read the text I copied to the end. It's in the last sentence.
Dividend is a profit share, which is clear in most cases that it is distributed from the profit.
There are also negative examples such as Nextera, which take on debt for this and then have a payout ratio of over 100%.
Dividend is a profit share, which is clear in most cases that it is distributed from the profit.
There are also negative examples such as Nextera, which take on debt for this and then have a payout ratio of over 100%.
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@Joris but thank you for the detailed explanation !!! <3
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•8Lun
@FloShares That can be good. But it is initially discounted 1:1. Many also use the discount to get in and then the share price rises, which is a quality feature of a good dividend growth share. But there is a difference between a 52% dividend yield and a 0.9% yield. You don't make up the 52% discount in one day.
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