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

Is this high-flyer a good option for income investors?

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If you want to receive the next Lovisa Holdings Ltd (ASX: LOV) dividend, then you will need to be quick.

That's because the rapidly growing fashion jewellery retailer's shares will be going ex-dividend soon.

When a company's shares go ex-dividend, it means the rights to the dividend are settled.

As a result, buying shares on or after that day will lead to you missing out on pay day. Instead, the seller of the shares will be the one getting a paycheck.

The Lovisa dividend

As a reminder, earlier this month Lovisa released its half-year results and reported an 18.2% increase in revenue to $373 million and a 12% lift in net profit after tax to $53.5 million.

This strong growth was underpinned by its global expansion, with 74 stores opening during the half to take the total to 854 by the end of December.

This allowed the Lovisa board to increase its 30% franked interim dividend by almost 32% to 50 cents per share.

Based on the current Lovisa share price of $31.87, this equates to a reasonably attractive 1.6% dividend yield for investors.

When is pay day?

Investors won't have long to wait until this dividend is paid.

Lovisa's shares are scheduled to go ex-dividend for the 50 cents per share distribution next week on Tuesday 5 March.

After which, the company is planning to make its payment to eligible shareholders the following month on 18 April.

Should you invest?

Most brokers appear to believe that Lovisa's shares are trading above or about fair value following a strong run over the last 12 months.

For example, Morgan Stanley has an overweight rating and $32.50 price target on its shares and Bell Potter has a buy rating and $30.70 price target on them. These price targets are both broadly in line with where its shares trade today.

Motley Fool contributor James Mickleboro has positions in Lovisa. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia has recommended Lovisa. 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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