Dividend cover
Dividend cover is a measure of the ability of a company to maintain the level of dividend paid out. The higher the cover, the better the ability to maintain dividends if profits drop. For example, if the dividend cover is 3, this means that the firm’s profit attributable to shareholders was three times the amount of dividend paid out.
Dividend Play
Buying cum – dividend shares just before the ex – dividend date and selling is ex – dividend, making a profit. However, the success of this depends upon quite a few eventualities: that the share price does not fall after the ex – dividend date (it may), that the share transfer process does not fall after the ex – dividend date, that the share transfer process does not take too long, and that the brokerage, for buying and selling, is lower than the dividend gained by this opportunistic ploy.
Dividend Rollover Plan
An investment strategy in which a dividend-paying stock is purchased right before the ex-dividend date, which gives the purchaser the right to the divided, with the position being sold off shortly after the ex-dividend date. The sole intention of this practice is to reap the value of the dividends while breaking even on the shares. Ideally, this strategy is designed to maximize short-term return on shares while minimizing risk.
it is a short – term investment policy in which a person buys a share before it has become ex – dividend. He collects the dividend, and when the price has recovered from its ex – dividend level and rises a little, he sells it at a small profit which covers for the share transfer charges and brokerage.