Benzinga | Dec 30, 2020 10:19AM EST

Understanding Encompass Health's Ex-Dividend Date

Encompass Health (NYSE:EHC) declared a dividend payable on January 15, 2021 to its shareholders as of October 20, 2020. It was also announced that shareholders of Encompass Health's stock as of January 4, 2021 are entitled to the dividend. The stock is expected to become ex-dividend 2 business day(s) before the record date. Encompass Health, which has a current dividend per share of $0.28, has an ex-dividend date scheduled for December 31, 2020. That equates to a dividend yield of 1.7% at current price levels.

The Significance Of Ex-Dividend Dates

An ex-dividend date signals when a company's shares cease to trade with its current dividend payout. There is a small intermission period before the company announces a new dividend. Usually, a company's ex-dividend date falls one business day before its record date. Investors should keep this in mind when purchasing stocks because buying them on or after ex-dividend dates does not qualify them to receive the declared payment. Newly declared dividends go to shareholders who have owned that stock before the ex-dividend date. Typically, companies will announce and implement new dividend yields on a quarterly basis.

Encompass Health's Dividend History

Over the past year, Encompass Health has seen its dividend payouts remain the same and its yields climb upward overall. Last year on December 31, 2019 the company's payout sat at $0.28, which has returned to its value today. Encompass Health's dividend yield last year was 1.68%, which has since grown by 0.02%.

Companies use dividend yields in different strategic ways. Some companies may opt to not give yields altogether to reinvest in themselves. Other companies may opt to increase or decrease their yield amounts to control how their shares circulate throughout the stock market.

Click here to find details on Encompass Health's previous dividends.