Brunswick Corp. Sparks Interest with Upcoming Dividend Alert
This morning, a “Potential Dividend Run Alert” was issued for Brunswick Corp. (NYSE: BC) via our DividendChannel.com Dividend Alerts service, a complimentary resource for investors. Let’s delve deeper into what this means.
Understanding the Dividend Run Concept
So, what exactly is a “Dividend Run”? This concept was first introduced to us during a ValueForum conference. To grasp it fully, we must begin with the ex-dividend date.
The ex-dividend date is a critical trading day. On this date, new buyers of the stock do not qualify for the upcoming dividend. In simpler terms, to receive the dividend, shares must be purchased before this date.
Typically, one would expect the stock price to drop by the dividend amount on the ex-dividend date. For instance, if an investor is entitled to a $0.42 dividend before this date, but not after, a decrease in the stock price makes sense. If the price did not drop, buyers would effectively pay $0.42 more for the shares without receiving the dividend.
The Anticipation of Rising Prices
Considering that the stock is expected to drop by the dividend amount, one might wonder if the stock should also rise ahead of the dividend. Indeed, if a dividend-paying stock only fell on ex-dividend dates, it could eventually become worthless, which seems illogical for a company consistently generating profits and paying dividends. Therefore, there exists a natural pressure for stocks to gradually increase in anticipation of forthcoming dividends, leading to the idea of a potential Dividend Run.
It’s important to note that different investors have various strategies for executing Dividend Runs. Some prefer specific entry and exit dates, while others may adopt a dollar-cost averaging approach. Many opt to buy shares shortly before the ex-dividend date, hold onto them for the dividend, and then sell afterward. In contrast, some choose to sell the day before the ex-date to maximize potential capital gains, often buying about two weeks prior to their planned sale.
An Example of Brunswick Corp.’s Dividend History
Let’s consider the $0.42 dividend that went ex-dividend on August 21, 2024. The day before this date, shares of BC closed at $75.70. On August 6, 2024, which is two weeks prior, shares were priced at $74.78. This indicates that in the weeks leading up to the dividend, there was a price increase of $0.92.
Reviewing Brunswick Corp.’s last four dividends, using this strategy would have netted investors capital gains exceeding the dividend amount each time. In total, these “Divvy Runs” yielded a gain of +$16.48, surpassing the total dividend amounts of $1.66 paid during the same period. Below is a breakdown of this performance:
| Ex-Dividend | ——Price 2 Weeks Prior—» | ——Price 1 Day Prior—» | Run Gain/Loss | |||
|---|---|---|---|---|---|---|
| 08/21/24 | 0.42 | 08/06/24 | 74.78 | 08/20/24 | 75.70 | +0.92 |
| 05/10/24 | 0.42 | 04/25/24 | 80.00 | 05/09/24 | 83.81 | +3.81 |
| 02/23/24 | 0.42 | 02/07/24 | 83.47 | 02/22/24 | 88.77 | +5.30 |
| 11/21/23 | 0.40 | 11/06/23 | 72.61 | 11/20/23 | 79.06 | +6.45 |
| Div Total: | 1.66 | “Divvy Run” Total: | +16.48 | |||
What’s Next for Brunswick Corp.?
In roughly two weeks, Brunswick Corp. (NYSE: BC) will go ex-dividend for its latest $0.42 dividend per share. Will previous patterns repeat? Only time will tell.
Upcoming Dividend: $0.42/share
Ex-Div Date: 11/20/24
Payment Date: 12/13/24
Dividend Frequency: Quarterly
Full BC Dividend History »
As investors often say, past performance does not guarantee future results. However, for those focused on Dividend Runs, BC remains a noteworthy stock to consider with its implied annualized yield of 2.08%.
Also see:
• MCY Average Annual Return
• CYBR Stock Predictions
• EQH shares outstanding history
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
