1.On the topic of dividend increases
A good resource to review the previous week in dividend increases is by looking up or subscribing to Justin Law on Seeking Alpha
weekly summary published around Saturday evening
A busy week with quite a few increases like$Fifth Third(FITB)$ $Farmers & Merchants Bancorp, Inc.(FMAO)$ $Innovative Industrial Properties Inc(IIPR)$ $New Jersey Resources(NJR)$ $Realty Income(O)$ $Philip Morris(PM)$ $Texas Instruments(TXN)$ $U.S. Bancorp(USB)$ 2.Ex-dividend this week
1 Aristocrat-MDT$Medtronic PLC(MDT)$ will pay dividend on Sep 22.
1 Contender-AVGO$Broadcom(AVGO)$ will pay dividend on Sep 21.3.Most of the beginners don't know the actual meaning of various corporate action in the stock like Dividend, Bonus, Split, Rights, etc.
Let's decode meaning of all these corporate action and what implication it has on company's stock price and valuation in this:
1/ Cash Dividend:
A cash dividend is the distribution of funds or money paid to stockholders generally as part of the corporation's current earnings or accumulated profits.
Stock price also goes down in same Dividend value as on Ex-Dividend Date.
2/ Stock Dividend:
A stock dividend is a dividend payment to shareholders that is made in shares instead of cash. The stock dividend has the advantage of rewarding shareholders without reducing the company's cash balance.
So far, no Indian company has given stock dividend.
3/ Bonus:
Bonus shares are additional shares given to the current shareholders. These are company's accumulated earnings which are not given out in the form of dividends, but are converted into free shares.
In Bonus, stock price falls with respect to bonus ratio.
4/ Split:
A stock split is when a company increases the number of its outstanding shares to boost the stock's liquidity.
In Split, stock price and face value of stock falls with respect to split ratio.
5/ Reverse Split:
A reverse stock split is a type of corporate action that consolidates the number of existing shares of stock into fewer (higher-priced) shares.
No Indian listed company has done that so far.
Price and Face Value of stock increases because of this.
6/ Rights Issue:
In rights offerings, companies grant shareholders the right, but not the obligation, to buy new shares at a discount to the current trading price.
Right issue dilutes the shareholding of the company as it depends whether shareholder exercise it or not.
7/ Spin Off:
When a company creates a new independent company by selling or distributing new shares of its existing business, this is called a spinoff. A spinoff is a type of divestiture.
A company creates a spinoff expecting that it will be worth more as an independent entity.
8/ M&A:
The term mergers and acquisitions (M&A) refers to the consolidation of companies or their major business assets through financial transactions between companies.
A company may purchase and absorb another company outright, merge with it to create a new company, acquire some or all of its major assets, make a tender offer for its stock, or stage a hostile takeover.
https://twitter.com/DividendWave/status/1571416681964273666
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