When stocks that payout dividends/interest monthly i assume the share price of the stock temporarily goes down after the distribution is payed . If that is correct would it be wise to buy into that stock at that point when the stock is lower after the distribution ?
Also i can't decide whether to top up my enbridge position or start a new position in pembina . Do you have a preference ? Is it a good time to take on an energy position in addition to CNQ which i currently have ?
Thanks again and deduct as necessary .
Bill C
Stocks do tend to fall 'a bit' on ex-dividend dates. but because this is a regular occurence this action also tends to be priced into the stock's valuation, and it is next to impossible to profit from the moves. Yes it can be done at times. But many times the market will move the stock much more than the dividend move. Trust us, we have watched this phenomenon for decades and have had numerous enquiries on it. It can work a bit better on special dividends, where the payment is larger. For example, a $5 special dividend might see a stock decline by only $4 on the ex-dividend date. In a taxable account the possibility of after-tax gains are even less. The infrastructure sector has been hit with higher interest rates, but dividends are largely secure, and we think the sector will do better when the current rate fears dissapate. We like both ENB and PPL. We prefer ENB today, but from a diversification standpoint we would be comfortable adding PPL instead of 'more' ENB.