Want the massive Westpac dividend? Here's why you need to hurry

Westpac's latest dividends are about to slip through your fingers…

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It's been an interesting day for the Westpac Banking Corp (ASX: WBC) so far this Wednesday. Westpac shares opened in the green this morning, starting out at $28 flat after closing at $27.89 yesterday. This ASX 200 bank stock even rose to hit a new 52-week high soon after trading commenced – $28.05.

But since then, investors have cooled their jets. At present, Westpac has dropped convincingly into the red. The bank is currently down a hefty 0.75% at $27.68 a share.

Investors can expect continued volatility in the Westpac share price tomorrow as well. That's because tomorrow is the day that Westpac is scheduled to trade ex-dividend for its latest shareholder payment.

It was only on Monday this week that Westpac revealed its latest earnings report, covering the six months to 31 March.

As we covered at the time, these earnings were welcomed by investors. That was despite some less-than-rosy numbers. The bank reported a 4% drop in net operating income to $10.59 billion. As well as a 16% fall in net profits to $3.34 billion.

But it was probably Westpac's capital return plans that gave investors something to cheer about.

For one, the bank announced a new $1 billion share buyback program. But it also revealed that its next interim dividend would come in at 75 cents per share. This payment will be fully franked of course. That's a happy 7.14% rise over last year's interim dividend of 70 cents per share.

Big dividends coming out of Westpac shares

It got better though. Westpac also surprised investors by pulling an additional special dividend out of its hat. In addition to that interim dividend of 75 cents per share, investors will also receive a special dividend of 15 cents per share. This payment will also come with full franking credits attached.

As my Fool colleague covered earlier this week, these dividends represent a payout ratio of 74% of Westpac's earnings for the period.

If we combine these two dividend payments with Westpac's final dividend of 72 cents per share that shareholders bagged back in December, we get an annual total of $1.62 per share. At the current Westpac share price, this would give the bank stock a weighty dividend yield of 5.85%.

However, if investors wish to see this cash arrive on their bank accounts but don't yet own Westpac shares, time is running out.

That's because the Westpac share price is scheduled to trade ex-dividend tomorrow, 9 May.

This effectively means that anyone who doesn't own Wetpac shares as of the close of trade today will miss out on these latest dividends.

From tomorrow, any new Westpac investors will have to wait until the next dividend from Westpac is revealed before they receive a passive income paycheque.

As such, expect to see a big drop in the Westpac share price on the commencement of trading tomorrow to reflect this inherent loss of value.

For eligible Westpac investors, dividend payday has been set for 25 June next month.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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