Pembina Pipeline Corp: Insights on Upcoming Dividend Run
This morning, a “Potential Dividend Run Alert” was issued for Pembina Pipeline Corp (NYSE: PBA) through DividendChannel.com. Here’s a concise breakdown of the situation.
Understanding a “Dividend Run” is crucial. The term refers to the expected movement of a stock’s price before its ex-dividend date. This date indicates when a buyer no longer qualifies for that dividend, necessitating a purchase before this date for eligibility.
Typically, stock prices are expected to drop by the dividend amount on the ex-dividend date. For example, if a dividend of 0.514 is declared, the stock price should decrease by that amount to reflect that future buyers won’t receive the dividend.
This anticipatory behavior can create upward pressure on the stock’s price leading up to a dividend declaration. If a dividend-paying stock continually falls on ex-dates, it could theoretically reach zero, which is illogical for a profitable company. Therefore, there’s an expectation for a stock to rally ahead of its dividend payouts.
Investors have different strategies regarding timing with dividend captures. Some target specific buy and sell dates, while others utilize dollar-cost averaging. Many invest shortly before the ex-dividend date, hold through the dividend payment, and sell thereafter. Others prefer to sell just before the ex-date for maximum capital gains, sometimes starting purchases two weeks prior.
Take, for example, the 0.508/share dividend that became ex-dividend on 09/16/24. Before this date, shares closed at 41.28 on 09/13/24, and at 40.03 two weeks prior on 08/29/24. This resulted in a price gain of 1.25 over that period.
Reviewing Pembina’s last four dividends, this approach yielded a capital gain exceeding the dividend amount three out of four times, totaling +3.41 in gains against a dividend total of 2.001. The specific data is as follows:
| Ex-Dividend | Price 2 Weeks Prior | Price 1 Day Prior | Run Gain/Loss | |||
|---|---|---|---|---|---|---|
| 09/16/24 | 0.508 | 08/29/24 | 40.03 | 09/13/24 | 41.28 | +1.25 |
| 06/17/24 | 0.503 | 05/31/24 | 37.13 | 06/14/24 | 37.05 | -0.08 |
| 03/14/24 | 0.496 | 02/28/24 | 34.75 | 03/13/24 | 35.93 | +1.18 |
| 12/14/23 | 0.494 | 11/29/23 | 33.13 | 12/13/23 | 34.19 | +1.06 |
| Div Total: | 2.001 | “Divvy Run” Total: | +3.41 | |||
In approximately two weeks, Pembina Pipeline Corp will go ex-dividend for a dividend of 0.514/share on 06/16/25, with a payment date of 06/30/25. This dividend is paid quarterly.
Past performance may not guarantee future results. However, investors keen on Dividend Runs should monitor PBA, which offers an implied annual yield of 5.49%.
Stay updated for future Dividend Run candidates.
Also see:
- Dividend Aristocrats List
- Funds Holding ZEO
- GRMN Dividend History
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
