What is Dividend

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Dividend is supply of portion of company earning. But decided by board of director to its shareholders. Therefore dividend issue as cash payments. Such as stock of shares and other property.  Moreover, you can view on divided history. However, dividend rate are quoted in terms of amount. Hence, you can see best dividend stock list.  To know better see high yield stock list.

Importance of Dividend

Dividend will receive for each share. And it can also quote in terms of percent of current market price. So it referred as dividend yield. Therefore net profits of company will allotted to shareholders as dividend. Probably, company can use net profits to repurchase their own shares in open market. Hence, see best dividend paying stock for long term.

However, company can do buyback their shares in market. In addition, dividends and buy back share do not change value of company shares. Therefore see quarterly dividend paying stocks in India. Similarly, ETF and Mutual fund shareholders will receive dividend as well. Hence, shareholders have to approve dividend payments.

Therefore Mutual funds pay interest and dividend from their portfolio. But capital gains are paid in year end. Dividend refers to reward, cash that company gives to shareholders. Hence for more details check high dividend paying stocks in India.

Similarly, dividend issued in various forms. Such as cash payment, stocks and any other form. However, it is not obligatory for company to pay dividend. Probably, dividend is usually part of profit that company shares with its shareholders.

However, after paying to its creditors company can use part or whole of profits to reward its shareholder as dividends. Moreover it can also skip paying dividends. Similarly, company announces dividend to all shareholders. And it also fixes record date.

Probably, who are registered on fix date is eligible to get dividend payout. But in proportion to their share holding. Usually company will mail cheques to shareholders in week. Therefore stocks are normally bought or sell with dividend.

Types of Dividend

Dividends are basic idea of investment. But when you purchase shares in company. And you will have hope that price of shares will increase. However, you also look for return on your investment. So in form of dividend payout. Therefore as company shareholder you are part of company.

However, company can share its profits with four different types of dividends.  Such as Cash dividend, stock dividend, scrip dividend and bond dividend.  For more information see monthly dividend stock list. Hence, check dividend growth stock list.

Cash Dividend

Cash Dividend is one of most common type of dividend. And it paid in cash. But shareholder amount give out to shareholder on date of declaration. Therefore on record date amount will be given to shareholder. Because, finally payment are made on date of payment. Moreover, companies have enough cash balance to pay shareholders in cash.

However, let say you are interested in 10 stocks. And you want to find out dividend payout dates for each. But in order to receive dividend you must own your stock on given record date. If you purchase stock on or after ex- dividend date. You will not receive dividend. To know more details use ex-dividend date tool to search all securities.

Stocks dividend or bonus shares

Stocks dividend are issued when company in short of cash. But they still issue stock to shareholders to keep happy. And you will get additional shares for your holdings. Therefore you don’t have to pay extra for these bonus shares. Because you can increase number of shares of firm.

However, let says company announce 10% of stock dividend. And you own 100 shares. You will receive 10 shares additional for your 100 shares. But, total market value of company will not change.  Because, you will own 1% of stock dividend from company.  Moreover, it only changes in price of your shares.

Scrip Dividend

Scrip dividend has shorter maturity periods. And company issues promissory note to shareholders. But payment of dividend confirms on future date. Because, it may not bear any interest. Moreover, these types of dividend are issued. If company does not have enough money. Therefore it requires some time to convert its current assets into cash.

Bond Dividend

Bond dividends are related to scrip dividends. But only difference is they carry long maturity period. And it bears interest. Usually dividend paid in cash. However, in some situation they will pay in other forms of dividend. Find out more about dividend reinvestment plans. Hence, check out free Dividend stock screener tool. It gives you to find out market by industry, market cap and frequently payout.

Difference between record date and ex-dividend date

Stock of record date and ex-dividend date are important. You need to look at two important dates. In addition, like record date or date of record and ex-dividend date or ex-date. Therefore when company speak out on dividends. But it set record date on which you must own shares. And then you are eligible for dividend. Such as split shares, bonus, right issue or other capital gains.

However, companies also use this date. Because, to send statement, financial report and other information. But record date is set by board of directors. Probably, record date give out notice to board of directors. Moreover, once record date is set by company. Therefore ex-date is set base on stock exchange rule.

Similarly, Ex-date is set for stocks. And ex-date is usually set for stocks two business days before record date. Therefore it is also important to know ex-date also. Probably, if you purchase stock on its ex-dividend date or after. In addition, you will not receive next dividend payment. Moreover, seller will get dividend. However, if you purchase stock before ex-dividend date. Hence, you will get dividend.

Therefore, there are divided into four dates. However, you can view top all time dividend paying stocks. See below example table

Declaration date Ex-dividend date Record date Payment date
Friday 7/26/2017 Thursday 08/08/2017 Monday 08/12/2017 Tuesday 9/10/2017

 

26th July Company declares dividend payout on September 10th to shareholders. But your name must be appearing on shareholders list on or before August 12th. And then you are eligible to get dividend. If you not purchase stocks by August 8th. You will not receive dividend. Moreover, you can see record date falls on Monday.

Probably, without weekends and holidays ex-dividend set for business days. However, if you bought stock on Thursday or after you will not get dividend. At same time, if you purchase before ex-dividend date will receive dividend. Therefore price of stock may fall by that amount on ex-dividend date. But you must hold shares two days before. Since, T+2 trading cycle follows to clear and settle of trades.

Finally, to learn more about dividend yield stock. See dividend yield stock. Therefore you can track highest yielding companies. Hence, current earnings per share increase. See more risk of dividend paying stock and dividend dates.

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