Upcoming Dividend Run For ARES? | U.S. Markets

This morning a “Potential Dividend Run Alert” went out for Ares Administration Corp (NYSE: ARES), at our DividendChannel.com Dividend Alerts service (a free e mail alerts characteristic). Let’s take a look at the state of affairs in larger element, we could?

First of all, what’s a “Dividend Run” anyway? That is an attention-grabbing idea which we first discovered about at a previous ValueForum convention. And to best clarify the idea, we need to start out with the anticipated conduct of a stock on its ex-dividend date.

For anybody unfamiliar with the time period, the ex-dividend date marks the trading day when any purchaser of the stock is no longer entitled to the referenced dividend — in different phrases, to be eligible to obtain the dividend in query, one would have needed to buy their shares earlier than the ex-dividend date.

All else equal, the stock price can be anticipated to drop by the dividend quantity on that ex-date (bear in mind, that is “all else equal” and naturally different components will drive shares larger/decrease on any given day). However give it some thought: if a purchaser is entitled to a 1.12 dividend earlier than ex-date, however no longer entitled to that quantity on or after ex-date, then this drop makes excellent sense! As a result of if the shares did not drop by that very same 1.12 the following day, then successfully, patrons would successfully be paying 1.12 more for a similar share of stock.

However now take into consideration this: if a stock is predicted to drop by the dividend quantity (all else equal) on ex-date, then in flip, should not that stock be anticipated to rise someday forward of a dividend? In any case, if a dividend-paying stock did not ever rise and solely fell on each ex-date, then finally after enough dividend funds these shares would have fallen to zero. And that would not make any sense for a company regularly incomes money and paying dividends. So certainly, “sometime” earlier than a given dividend, there needs to be kind of a built-in “pressure” for a stock to step by step rise in expectation of that subsequent money dividend… in different phrases: stress for the stock to have a potential Dividend Run.

And see we put the phrase “sometime” in quotes in that final sentence, as a result of there are differing views amongst completely different dividend buyers about timeframe on the subject of capturing Dividend Run results. Some wish to invest (after which additionally to promote) on particular goal dates; others wish to make use of some kind of greenback value averaging. Some wish to invest shortly earlier than ex-div, maintain for the dividend, after which promote on or after ex-date (having really capturing the dividend / obtained the income). Others wish to promote the day earlier than ex-date (the final doable day the place the client of the shares will nonetheless be “paying for” the upcoming dividend) with the thought to try to maximize capital gain. On this capital-gain-focused situation, one common timeframe we have seen mentioned, is to buy about two weeks (ten trading days) previous to the focused sale date.

For instance, contemplate the 0.93/share ARES dividend that went “ex-dividend” on 12/17/24. On the prior trading day — the final day the place a vendor is aware of that the client of their shares might be anticipating that dividend quantity — shares of ARES closed at 183.70. And two weeks (ten trading days) previous to that, on 12/02/24, shares closed at a price of 173.95. That implies that within the ultimate two-week run-up to the 0.93 dividend, ARES gained 9.75 in price.

Trying back on the final 4 dividends paid by ARES, this strategy would have captured a capital gain in extra of the dividend 3 out of 4 occasions, with a “Divvy Run” complete of +7.05 in capital beneficial properties. By the way, that exceeds the sum complete dividend quantities throughout these final 4 dividends, of 3.72. This is the information:

In about two weeks from now, Ares Administration Corp (NYSE: ARES) will go ex-dividend for its latest dividend of 1.12/share. Will Dividend Run historical past repeat itself?

Upcoming Dividend: 1.12/share
Ex-Div Date: 03/17/25
Cost Date: 03/31/25
Dividend Frequency: Quarterly
Full ARES Dividend Historical past »

Because the saying goes, previous efficiency is rarely a guarantee of future returns. However one factor’s for sure: for these buyers who depend Dividend Runs among the many instruments of their arsenal, ARES is a good dividend stock to find out about and have in your radar screen with its implied annualized yield of 2.62%.

Keep tuned for future Dividend Run candidates, and if you would like to obtain e mail alerts proper into your inbox, enroll in our free Dividend Alerts characteristic, courtesy of DividendChannel.com.

Additionally see:

• CVRS Historic Inventory Costs
• RECN YTD Return
• OLIT YTD Return

The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.