What is a Dividend?

In short

A dividend is a distribution of profits by a corporation to its shareholders. They are often paid quarterly and distributed in cash.

Understanding Dividends

When companies achieve a surplus or profit they are able to pay a dividend to their shareholders. However not all companies pay a dividend. Some companies want to reinvest their profits into growth. Younger companies often don't pay a dividend.

Requirements

To receive a dividend you need to own shares of a dividend paying company before the ex-dividend date.

Frequencies

Dividends are paid in varying frequencies. Most relevant dividend frequencies are monthly, quarterly, semi-annually and annually.

Dates

There are some important dividend dates.

• Ex-dividend date
  The date at which eligibility of receiving this date expires. If you buy shares on or after this date, you will not receive this dividend.
• Payment date
  The date at which the dividend will be payed out to the eligible shareholders.
• Announcement date
  The date at which a company announces its dividend.
  

This information is educational only and not a recommendation to buy, hold, or sell an investment or financial product, or take any action. This information is neither individualized nor a research report, and must not serve as the basis for any investment decision. All investments involve risk, including the possible loss of capital. Information is from sources deemed reliable on the date of publication, but Stock Events does not guarantee its accuracy.