Stock Dividends and Their Processing Time

Stock dividends, also called bonus shares, are additional shares distributed by publicly traded companies to their shareholders. If you hold shares when trading closes on the day before the ex-dividend date, you'll be eligible to receive bonus shares. Longbridge will credit the stock dividend directly to your account on the payment date (the bonus shares are identical to your existing shares).

On the ex-dividend date, the stock price usually drops, resulting in a temporary loss in your portfolio. However, this loss will be balanced out by the stock dividend credited to your holdings. Essentially, this means that your portfolio is now a combination of existing shares (of lower value) and bonus shares (equal in value to the price drop).