Regions Financial Corp: A Closer Look at Upcoming Dividends and Potential Gains
This morning, a “Potential Dividend Run Alert” was issued for Regions Financial Corp (NYSE: RF) through our DividendChannel.com Dividend Alerts service. Let’s examine what this means in detail.
Understanding the Dividend Run Concept
For those unfamiliar with the term, a “Dividend Run” refers to the behavior of a stock leading up to its ex-dividend date. This is an important moment for investors, as it determines who is eligible for the upcoming dividend payment.
The ex-dividend date is the first trading day when a new buyer is no longer eligible for the upcoming dividend. Therefore, to qualify for a dividend, one must purchase shares before this date. Typically, on the ex-dividend date, a stock’s price is expected to drop by the dividend amount, all else being equal. For example, if a stock offers a dividend of $0.25, it should drop in value by about that amount on the ex-dividend date.
The Idea Behind Dividend Runs
If a stock’s price is anticipated to drop on ex-dividend, it stands to reason that it should rise beforehand due to demand for the dividend. If consistent drops occurred after each dividend payment without any price increases, the stock could theoretically lose all its value, which contradicts the concept of a profitable company that continues to pay dividends.
Diverse Investment Strategies
Investors have different strategies for capturing dividends. Some choose specific dates for buying and selling, while others might focus on dollar-cost averaging. A common approach is to invest a couple of weeks before the ex-dividend date, hold through the dividend, and then sell afterward. Another strategy is to sell the day before the ex-dividend date to maximize capital gains.
Recent Dividend Performance of Regions Financial
As an example, consider Regions Financial’s recent dividend of $0.25, which went ex-dividend on 09/03/24. Shares closed at $23.42 the last trading day before the ex-dividend, rising from $21.50 two weeks earlier on 08/16/24. This equated to a gain of $1.92 as the dividend approached.
Examining the last four dividend payments, it appears that this strategy captured capital gains exceeding the actual dividends 3 out of 4 times, resulting in a “Divvy Run” total of $2.99. This is above the total dividend payouts of $0.97 over those periods. Here’s a summary:
| Ex-Dividend | ——Price 2 Weeks Prior—» | ——Price 1 Day Prior—» | Run Gain/Loss | |||
|---|---|---|---|---|---|---|
| 09/03/24 | 0.25 | 08/16/24 | 21.50 | 08/30/24 | 23.42 | +1.92 |
| 06/03/24 | 0.24 | 05/16/24 | 20.10 | 05/31/24 | 19.35 | -0.75 |
| 02/29/24 | 0.24 | 02/13/24 | 17.89 | 02/28/24 | 18.57 | +0.68 |
| 12/07/23 | 0.24 | 11/21/23 | 15.96 | 12/06/23 | 17.10 | +1.14 |
| Div Total: | 0.97 | “Divvy Run” Total: | +2.99 | |||
Regions Financial Corp plans to go ex-dividend for another dividend of $0.25 per share on 12/02/24. Investors will be eager to see if this pattern continues.
Upcoming Dividend Details
Upcoming Dividend: 0.25/share
Ex-Div Date: 12/02/24
Payment Date: 01/02/25
Dividend Frequency: Quarterly
Full RF Dividend History »
It’s important to remember that past performance does not assure future success. However, for investors who focus on Dividend Runs, RF remains an intriguing stock with an implied annualized yield of 3.79%.
Stay updated with future Dividend Run candidates, and if you’d like real-time alerts, consider signing up for our free Dividend Alerts via DividendChannel.com.
Also See:
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
