Should you buy these shares before they go ex-dividend?

Within the next couple of weeks there are a number of popular income shares that will go ex-dividend for their latest payouts.

Should you snap them up before they go ex-dividend?

Rural Funds Group (ASX: RFF)

This real estate investment trust’s shares go ex-dividend for its 2.5 cents per share quarterly distribution on June 26. I think it would be well worth considering an investment in Rural Funds before its shares go ex-dividend, especially given the positive long-term outlook that the trust has. Rural Funds owns 38 properties across six different agricultural sectors including poultry, cattle, and wine production. These assets have an average of 12.5 years left to run on their tenancies and have rental indexation built into them. I believe this gives investors a lot of visibility on its future cash flows and should put it in a position to increase its distribution at a steady rate over the coming years. Rural Funds’ shares currently offer a trailing distribution yield of 4.8%.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

The shares of the operator of Australia’s busiest airport are due to go ex-dividend on June 28 for its 18.5 cents per share distribution. This is a tricky one, in my opinion. Sydney Airport often gets classed as a bond proxy. Which effectively is a share that takes the place of bonds when yields are low. But with yields widening now as interest rates rise in the United States, there’s a danger that Sydney Airport’s shares will be sold off. I’m optimistic that its solid long-term growth prospects from the tourism boom will mean it avoids the inevitable bond proxy selloff, but this cannot be guaranteed. I would class it as a buy, but I would only consider taking a small position.

Transurban Group (ASX: TCL)

This toll road king is also due to go ex-dividend on June 28 for its 28 cents per share distribution. However, unlike Sydney Airport, I can’t help but feel that Transurban is a bona fide bond proxy that will be dragged lower when bond proxies fall out of favour. Because of this, I would suggest investors stay clear of Transurban despite the quality of its portfolio of roads. I’m concerned that there could be a mass exodus of shareholders when its shares go ex-dividend.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED, Sydney Airport Holdings Limited, and Transurban Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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