Are you sure about not getting the dividend if you buy the stock after hours? I've done only a few after hours trades, but as I can recall, they are listed by the broker along with other trades that day and have the same settlement date.
I have noticed that stocks sometimes don't drop by the amount of the dividend on the ex-dividend date.Sometimes they open higher.If anyone has some good experience buying stocks before the ex-dividend date and selling on the ex-dividend day,please share and let us know if this is a worthwhile strategy to pursue further.I have a website here that shows stocks that just went ex-dividend as well as upcoming dividend payments....http://www.companyboardroom.com/dividend.asp?month=20030415&day=20030415&date=20030415&client=cb
NASDAQ Trader, You'll also notice that stocks open higher than the previous day's close even when no dividend is in play! But actually, I think it's difficult to play this. I've seen stocks that seem to recover from the drop in price ex-dividend rather quickly. Others, particularly the ETFs with regular dividends and preferred stocks, seem to have runups in advance of the dividend and then sell off much more than the dividend is worth.
Here is an interesting scenario. FAVS declared a special dividend of about $1 per share a few months back. Not too coincidentally the stock also traded at a 52 week high right after that. It has since dropped over $3 per share. So get the news first and you can slop the piggys..
I've been looking into this recently with preferred shares and exchange traded debt. The dividends are decent and if the credit rating of the company isn't in flux, they trade esentially flat. There is an extremely low risk of the stock or bond blowing up on you overnight. It would be easy to backtest as well, buy a few days before the ex-date, or even at the close the day before. Sell on the open on the ex-date. I've eyeballed a few dozen charts of them, there might be something there, but I haven't looked at in in depth yet. I'm positive that if you own the stock at the close of business the day before the ex-date, you are entitled to recieve it (not sure about after hours trading). The date of record is going to be 3 days after the day before it goes ex. If you were the owner of the stock then, you get the dividend, even if you don't own on the actual date of record.
lescor, Conceptually I agree with you. But a consideration is that most of these stocks are thinly traded with wide spreads. Difficult to move in volume. Additionally, even without a rating change, they do react in price similar to the bond market. Backtesting over the last year with generally rising prices will bias your results. But good luck!