Management Pension Changes Impact (On Topic)

[UpstateNYUPSer(Ret)]

Because of a stock split? I've never heard that before.

That's because it rarely, if ever, happens.

 

[Returntosender]

Not necessarily:

Apple split their stock in a 7:1 ratio in 2014. The pre-split dividend was $.47/share. The most recent dividend was $.63/share.

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2017 Dividend Aristocrats List

 

[UpstateNYUPSer(Ret)]

The question was whether the dividend, if any, was affected by a split.

 

[Ms.PacMan]

Why is that PM?
You seem to have good advice in the past but I don't understand your logic.
If a stock is split the yield will be the same but since the stock share price was cut in half so will the dividend.
I've been through many share splits and the dividend was adjusted by the same factor.

Because a dividend is an amt. per share I assumed the dividend per share stayed the same because otherwise I don't see any real value in a stock split.

I've never experienced a stock split so I don't have any first hand knowledge but I read so much I just thought I would have learned that. It's good to learn if I'm wrong - I appreciate it really.

 

[UpstateNYUPSer(Ret)]

Because a dividend is an amt. per share I assumed the dividend per share stayed the same because otherwise I don't see any real value in a stock split.

I've never experienced a stock split so I don't have any first hand knowledge but I read so much I just thought I would have learned that. It's good to learn if I'm wrong - I appreciate it really.

You're not wrong.

I purchased Apple right after the 7:1 split as there was no way that I could have afforded (or could justify) paying $1K for 1 share of stock. The pre and post split dividend remained the same so stick holders of record received a 700% dividend boost post split.

 

[upschuck]

You're not wrong.

I purchased Apple right after the 7:1 split as there was no way that I could have afforded (or could justify) paying $1K for 1 share of stock. The pre and post split dividend remained the same so stick holders of record received a 700% dividend boost post split.

Wrong. Here is the dividend history for Apple from their website

 

[UpstateNYUPSer(Ret)]

You are right; however, the adjusted dividend is slightly higher.

 

[upschuck]

You are right; however, the adjusted dividend is slightly higher.

Nope 47¢ x 7 = $3.29, the exact amount of dividend before split.

 

[UpstateNYUPSer(Ret)]

Nope 47¢ x 7 = $3.29, the exact amount of dividend before split.

I think it was $.57 in April of this year.

 

[upschuck]

I think it was $.57 in April of this year.

That happened well after the split, I was assuming you meant just after the split.

 

[UpstateNYUPSer(Ret)]

That happened well after the split, I was assuming you meant just after the split.

I did. I messed up ---again.

 

[Orion inc.]

Anyone who bases their retirement plans on a pension, are going to be sadly mistaken in the future. Pensions have been dying for years and the writing is on the wall.

Diversity and plan without one is the way to go in this economic climate. Pensions and SS will be dead in our lifetimes.

 

[UpstateNYUPSer(Ret)]

Pensions will be slowly phased out in favor defined contribution 401k's.

SS will be saved by an increase in our payroll taxes.

 

[upschuck]

Anyone who bases their retirement plans on a pension, are going to be sadly mistaken in the future. Pensions have been dying for years and the writing is on the wall.

Diversity and plan without one is the way to go in this economic climate. Pensions and SS will be dead in our lifetimes.

Whoever votes to change SS would be committing political suicide. I don't really see that happening for a good long time.

 

[Orion inc.]

Whoever votes to change SS would be committing political suicide. I don't really see that happening for a good long time.

In this political climate? I don't think anything is political suicide anymore.

 

[upschuck]

In this political climate? I don't think anything is political suicide anymore.

Not gonna happen.

 

[Orion inc.]

Not gonna happen.

We will see. If congress can raid SS like before and then claim it's bankrupt and won't replace it, then I don't put it past them. 9% approval rating for congress. I don't think most of them care anymore about political suicide.

 

[Catatonic]

Because a dividend is an amt. per share I assumed the dividend per share stayed the same because otherwise I don't see any real value in a stock split.

I've never experienced a stock split so I don't have any first hand knowledge but I read so much I just thought I would have learned that. It's good to learn if I'm wrong - I appreciate it really.

The purpose of a share split is typically to allow individual shareowners the opportunity to buy more shares per dollar spent ... individuals sense better investment opportunities if they see a greater number of shares.
Once a stock like UPS becomes an "institutional investors'"* favorite stock like UPS did after it went public, stock price doesn't matter. When UPS was selected to be in the S&P 500, that really made stock price irrelevant.

A stock split is usually done by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector. The primary motive is to make shares seem more affordable to small investors even though the underlying value of the company has not changed.

Read more: What is a stock split? Why do stocks split?

 

[UpstateNYUPSer(Ret)]

The purpose of a share split is typically to allow individual shareowners the opportunity to buy more shares per dollar spent ... individuals sense better investment opportunities if they see a greater number of shares.
Once a stock like UPS becomes an "institutional investors'"* favorite stock like UPS did after it went public, stock price doesn't matter. When UPS was selected to be in the S&P 500, that really made stock price irrelevant.

A stock split is usually done by companies that have seen their share price increase to levels that are either too high or are beyond the price levels of similar companies in their sector. The primary motive is to make shares seem more affordable to small investors even though the underlying value of the company has not changed.

Read more: What is a stock split? Why do stocks split?

Bingo!!

No way I could justify spending $1K for a share of any stock, whether it is Apple, alphabet or Amazon.

I can justify spending up to $100/share.

 

[Returntosender]

The question was whether the dividend, if any, was affected by a split.

After the split the dividend will be adjusted. However UPS is considered a dividend aristocrat every year the dividend will go up.