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Ex-dividend, or XD, denotes that a stock is trading when it is not entitled to the current dividend. To show that a stock is trading ex-dividend, the sign XD is appended to the ticker symbol. For instance, Home Depot (HD) can be reported as HD if it is trading ex-dividend. On some platforms, XD or HDX. Sometimes XD is substituted for only X.
Ex-dividend signifies that the current dividend has already been paid to the stock seller and will not be received by the stock buyer. On the ex-dividend date, which is one business day prior to the record date, the stock often has a price decline equal to the dividend amount. The corporation decides who is qualified to receive the dividend on the record date.
Why Does XD Matter?
XD is significant since it has an impact on the timing of dividend payments and stock value. Purchasing the stock prior to the ex-dividend date is necessary if you wish to collect a dividend from a corporation. You will have to wait until the following dividend payment date to collect a payout if you purchase it on or after the ex-dividend date.
Similarly to this, you must sell a stock after it has gone ex-dividend if you want to do so and still receive the current dividend. You will lose your right to the dividend if you sell it before the ex-dividend date.
The stock price is also impacted by the ex-dividend date since it represents the decrease in value brought on by the dividend payment. For instance, if Home Depot pays a $1.90 per share dividend and its stock price was $300 prior to the ex-dividend day, all other things being equal, its stock price will decrease by $1.90 to $298.10 on the ex-dividend date.
This does not imply, however, that buying a stock prior to its ex-dividend date or selling it following its ex-dividend date are always wise moves. The price and performance of the stock are also influenced by other variables, including earnings, future growth possibilities, market circumstances, and investor mood. Before making any financial decisions, you should always conduct your own investigation and analysis.
How to Find Out When a Stock Goes XD?
You can seek for a stock's dividend information on a variety of websites and platforms to find out when it becomes ex-dividend. To find out the ex-dividend dates of different equities, for instance, you can utilize the Dividend Calendar on Investopedia. For the company's dividend declaration, which often contains the ex-dividend date, record date, and payment date, you can also check the company's website or news releases.
As an alternative, you can search for an ex-dividend date for a company using online resources like Dividend.com's Ex-Dividend Date Lookup. By market, industry, sector, dividend yield, frequency, and other criteria, you can filter results.
