JPMorgan Chase Set for Potential Dividend Run: A Closer Look
This morning, a “Potential Dividend Run Alert” was issued for JPMorgan Chase & Co (NYSE: JPM) via our DividendChannel.com Dividend Alerts service, a feature that provides free email notifications. Let’s dive deeper into what this means.
Understanding Dividend Runs
So, what exactly is a “Dividend Run”? This concept first came to our attention at a ValueForum conference. It relates to how a stock usually behaves around its ex-dividend date.
The ex-dividend date is crucial; it’s the day when new buyers will not receive the upcoming dividend. To be eligible for the dividend, shares need to be bought before this date. Typically, the stock price is expected to drop by the dividend amount on its ex-dividend date—assuming no other influences. For instance, if a stock offers a dividend of 1.25, and someone buys it after the ex-dividend date, they essentially pay 1.25 more for shares without the dividend payout.
However, if a stock is forecasted to drop on its ex-dividend date, one might expect it to rise in the weeks leading up to the dividend. If the stock only dropped, it wouldn’t make sense for a company that consistently earns income and pays dividends. Thus, there exists a “pressure” for stocks to gradually rise, creating a potential Dividend Run.
What to Consider About Timing
When trying to capture Dividend Run effects, investors have different strategies. Some prefer buying, holding until the dividend, then selling after the ex-dividend date to collect income. Others sell the day before the ex-dividend date to take advantage of capital gains. A common approach is to buy about two weeks before the anticipated sale date.
Take, for instance, JPMorgan’s 1.15/share dividend that went ex-dividend on 07/05/24. The day before—on 07/03/24—JPM shares closed at 208.69. Two weeks earlier, on 06/18/24, they closed at 197.00, indicating a price increase of 11.69 in the lead-up to this dividend.
Recent Dividend History and Performance
Reviewing the last four dividends paid by JPMorgan, using this strategy would have produced capital gains exceeding the dividend amount in 3 out of 4 instances, totaling +16.05. This figure surpasses the total dividends of 4.60 from the same period. Below is the detailed data:
| Ex-Dividend Date | ——Price 2 Weeks Prior—» | ——Price 1 Day Prior—» | Run Gain/Loss | |||
|---|---|---|---|---|---|---|
| 10/04/24 | 1.25 | 09/19/24 | 210.48 | 10/03/24 | 205.23 | -5.25 |
| 07/05/24 | 1.15 | 06/18/24 | 197.00 | 07/03/24 | 208.69 | +11.69 |
| 04/04/24 | 1.15 | 03/19/24 | 193.79 | 04/03/24 | 198.30 | +4.51 |
| 01/04/24 | 1.05 | 12/18/23 | 166.23 | 01/03/24 | 171.33 | +5.10 |
| Total Dividends: | 4.60 | “Divvy Run” Total: | +16.05 | |||
Looking Ahead
In roughly two weeks, JPMorgan Chase & Co (NYSE: JPM) will go ex-dividend for its latest dividend of 1.25/share. Will history repeat with another Dividend Run?
Upcoming Dividend: 1.25/share
Ex-Div Date: 01/06/25
Payment Date: 01/31/25
Dividend Frequency: Quarterly
Full JPM Dividend History »
While past performance doesn’t guarantee future results, it is evident that JPMorgan is a noteworthy stock for investors focused on Dividend Runs, boasting an implied annualized yield of 2.10%.
Stay tuned for future Dividend Run candidates, and if you’re interested in receiving email alerts directly to your inbox, consider enrolling in our free Dividend Alerts feature, brought to you by DividendChannel.com.
Also See:
• Institutional Holders of LRGG
• Funds Holding HDY
• TELL Historical Stock Prices
The views and opinions expressed herein belong to the author and do not necessarily reflect those of Nasdaq, Inc.
