Is It Smart To Buy Dominion Lending Centres Inc. (TSE:DLCG) Before It Goes Ex-Dividend?

As an investor, you're always on the lookout for opportunities to maximize your returns. One such opportunity presents itself when a company goes ex-dividend. But is it smart to buy Dominion Lending Centres Inc. (TSE:DLCG) before it goes ex-dividend? Let's dive into the details and find out.



First, let's understand what an ex-dividend date is. When a company declares a dividend, the ex-dividend date is the day on or after which the stock is traded without the dividend. In other words, if you buy the stock on or after the ex-dividend date, you won't receive the next dividend payment. For DLCG, the next ex-dividend date is February 28, 2025.

Now, you might be thinking, "Why would I want to buy DLCG before it goes ex-dividend? I won't get the next dividend payment!" While that's true, there are a few reasons why buying before the ex-dividend date can be beneficial:

1. Potential Price Dip: When a company goes ex-dividend, the stock price often dips by the amount of the dividend. This is because the dividend is essentially a distribution of the company's profits to shareholders, and the market adjusts the stock price to reflect this. By buying before the ex-dividend date, you might be able to snag the stock at a lower price.
2. Dividend Reinvestment: If you're a long-term investor, you might be able to reinvest the dividend you receive into more shares of DLCG. This can help you grow your portfolio over time.
3. Dividend Growth: DLCG has a history of dividend growth, with a 17.5% increase since 2017. By buying before the ex-dividend date, you're positioning yourself to benefit from future dividend increases.

However, there are also some risks to consider:

1. Market Volatility: DLCG's beta of 1.68 indicates that its stock price is more volatile than the market average. This increased volatility could lead to fluctuations in the company's earnings and cash flow, which may affect its ability to sustain or increase dividends.
2. Shareholder Dilution: In January 2024, a major risk of shareholder dilution was identified. This could potentially dilute the earnings per share and reduce the company's ability to maintain or grow its dividend payouts.
3. Profit Margin Trend: In November 2023, a minor risk related to the profit margin trend was noted. A decline in profit margins could lead to reduced earnings, which may impact DLCG's capacity to pay and increase dividends.



In conclusion, buying Dominion Lending Centres Inc. (TSE:DLCG) before it goes ex-dividend can be a smart move, but it's not without its risks. By understanding the potential benefits and drawbacks, you can make an informed decision about whether or not to buy DLCG before the ex-dividend date. As always, it's essential to do your own research and consider your personal financial situation before making any investment decisions.