Are stock divdends or cash dividends better? Which should I choose? - Seedly
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Anonymous

Asked on 25 May 2019

Are stock divdends or cash dividends better? Which should I choose?

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Daryl Liao, Fti
Daryl Liao, Fti
Level 7. Grand Master
Answered on 06 Dec 2019

I would take cash dividends. simply because I want to have the option of choosing what I can do with the cash. unless they're giving me a good rate for the shares Dividend!

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I would take cash dividends as this allows me to decide when I want to redeploy my funds.

If you take script dividends, you might end up with odd lots which can be harder to manage. The odd lot market has very unfavourable spreads, even for blue chips. So although most script dividends are offered at a prevailing discount to the last traded price, I don't bite.

The only case I might bite if there is a massive arbitrage opportunity. This is very very rare however.

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Bjorn Ng
Bjorn Ng
Level 9. God of Wisdom
Answered on 05 Dec 2019

Better to go for cash dividends! Because stock dividends most probably will give you odd lots, which if you are an OCD person like me, you will not like it at all hahaha!

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Bibiana
Bibiana
Level 7. Grand Master
Answered on 07 Dec 2019

If the stock is overvalued == cash dividends

If the stock is undervalued == stock dividends!

:)

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Jonathan Ang
Jonathan Ang
Level 7. Grand Master
Answered on 06 Dec 2019

Stocks if you want to re-invest in a no brainer way.

Cash if you want to re-deploy money into other companies.

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Eric Ong
Eric Ong, Project Analyst at 8Bit Global
Level 6. Master
Updated on 06 Dec 2019

Personally, I would choose Cash Dividend and only decide whether I should reinvest the dividend back to the same company or invest in other better value company.​​​

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I would take cash dividends. This is because with cash I can choose whether to reinvest the same company or use it to invest in other quality company I have found.

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Wallace Chai
Wallace Chai
Level 9. God of Wisdom
Answered on 06 Dec 2019

It always depends. If it is a high quality stock, i prefer stock dividends so i can have more shares of the company. But if my objectives since starting is to invest for dividend income, i will choose cash dividend.

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Junus Eu
Junus Eu
Level 9. God of Wisdom
Answered on 05 Dec 2019

Cash dividends! Because then you have a choice of whether to take money off the table, or reinvest.

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Choon Yuan Chan
Choon Yuan Chan
Level 9. God of Wisdom
Answered on 07 Dec 2019

I prefer cash dividends as it allows us the flexibility to deploy fund and does not need to think.Stock dvidends may end with odd lots which makes it difficult to sell later

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It depends on your investment objective.

If you intend to continue holding the stock for the long-term, then choose stock dividend.

If you intend to sell the stock soon, then choose cash dividend.

Here is everything about me and what I do best.

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Carol Tham
Carol Tham
Level 3. Wonderkid
Updated on 06 Dec 2019

It depends on the stock.

  1. Good yield (e.g. REITS with say 7-8% returns)

  2. The price offered now is lower than current market

  3. Good stock to keep

  4. You plan on using the money to re-invest anyways

Then go for the stock dividend. Cos you wont have to pay all the necessary fees that you normally would when you buy the stock.

I know alot of replies have indicated that odd shares make it difficult to sell, but that's not true. I have owned and sold odd shares and if the stock is a desired stock, you can always get to sell it. ​​​

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Adelyn K
Adelyn K
Level 5. Genius
Answered on 05 Dec 2019

I prefer cash dividends as i can then choose to re-invest and buy other stocks instead of the same stock. Also stock dividends usually give odd numbers of lots, which can be quite strange.

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The single biggest issue with stock dividends is the issue of having odd lot shares. Unless you subsequently buy a sizeable lot to round up your odd lot shares so they can be traded in its entirety, it is not wise to receive dividends in stock.

However, if you were to receive in cash dividends and then decide to buy more of this stock, you would incur comission for the trade.

If your strategy is to DCA into the stock for medium to long term from time to time , then stock dividends might be for you since you would be regularly buying into the stock and having the opporunity to round up the odd lots . Else, cash dividends is better.​​​

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Wilson Nid A Break
Wilson Nid A Break
Level 9. God of Wisdom
Answered on 05 Dec 2019

Most times will opt for cash dividends

But if that one company is an attractive long-term hold, will consider stock dividends to reduce transaction costs of re-investment

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Ericsson Ting
Ericsson Ting
Level 4. Prodigy
Answered on 27 May 2019

Cash dividend definitely,with cash you will have the flexibility to spend or reinvest the amount,plus it is shiok ti see money coming into your account without "working"

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Jonathan Chia Guangrong
Jonathan Chia Guangrong, Fund Manager at JCG Fund
Level 9. God of Wisdom
Answered on 27 May 2019

Cash dividends, unless you intend to hold the stock forever and pass it down as a heirloom. Odd lots can be sold via your broker (not brokerage platform) and comm is S$40 a pop

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I agree with Gabriel. I think that cash dividend is better than stock as right now I'm stuck with some odd lots and I do not know how do I dispose off it.

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Gabriel Tham
Gabriel Tham, Kenichi Tag Team Member at Tag Team
Level 9. God of Wisdom
Updated on 07 Jun 2019

I would choose cash. Because I want to avoid the odd lots for my stocks most of the time. However, if the scrip dividend is given at a very good discount, I opt for it.

Odd lots are hard to sell in the market.

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Siow Nan
Siow Nan

28 May 2019

Chose scrips for my srs Long term investments and main cash for my cash investments. No right or wrong. Might be costlier to get broker to sell off odd lots but you do also save on “reinvestment” fees if u opt for cash then invest in again.
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