Instead of working with regular quarterly payouts, I've focused my research on special dividend announcements. Dividend capture is a controversial topic and not everybody believes that any capture strategy can be consistently profitable.Īll that said, I've spent some time analyzing historical data and devised some ideas that based on limited testing, shows promise. Some try to buy before the dividend is announced, some sell on the ex-date, while others wait for a stock to recover to a predetermined price before selling.

But, in fact, many different factors influence a stock's price movements on any given day, and prices typically don't drop by the exact dividend amount on the ex-date.ĭividend capture players follow a variety of strategies to 'capture' the dividend. For starters, theoretically, the share price drops by the dividend amount on the ex-dividend date. That you only need to own a stock for one day to collect the dividend has inspired many investors to pursue a 'dividend capture' strategy, which involves holding a stock just long enough to collect the dividend, selling at or above their purchase price, and then moving on. You could look up the ex-dividend date for most U.S.-traded stocks on almost any financial website. That means that buyers on August 18 are buying the shares 'excluding the dividend.' But anyone who bought before August 18, and didn't sell, does get the dividend. August 18 is the 'ex-dividend date' for that dividend. That is, you could buy shares on August 17, sell them on August 18, and still collect the dividend.

But did you know that you'd only have to hold Microsoft shares for one day, August 17, to collect that payout. On September 10, Microsoft ( MSFT) will pay its regular $0.31 per share quarterly dividend.

Dividend capture strategy