Skip to main content

Important Dates for Dividend Investors

Dividends on stocks, mutual funds and ETFs can enhance your investment return and can provide income in retirement. Most dividends are paid quarterly, but many ETFs pay monthly dividends. Some also get preferential tax treatment, in that they are not taxed at your normal income tax rate, depending on your tax bracket. See this article for more information on that. 

A dividend payment procedure follows a chronological order of events and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment.

  • Announcement Date: Dividends are announced by company management on the announcement date, and must be approved by the shareholders before they can be paid.
  • Ex-dividend Date: The date on which the dividend eligibility expires is called the ex-dividend date or simply the ex-date. For instance, if a stock has an ex-date of Monday, May 5, then shareholders who buy the stock on or after that day will NOT qualify to get the dividend as they are buying it on or after the dividend expiry date. Shareholders who own the stock one business day prior to the ex-date - that is on Friday, May 2, or earlier - will receive the dividend.
  • Record Date: The record date is the cut-off date, established by the company in order to determine which shareholders are eligible to receive a dividend or distribution.
  • Payment Date: The company issues a payment of the dividend on the payment date, which is when the money gets credited to investors' accounts.
Note that usually the ex-date and record date are either the same or within a day or two. However, most brokerage firms, such as Schwab, require a couple of business days to record your purchase of the stock, so if you purchase it on the record date, you may not be included in that dividend. This is called the settlement date when you purchase your stock. You can check with your brokerage for their requirements. 

If I'm buying a stock and want the the next dividend, I normally buy it at least three days before the record date, which will be included in the announcement. 

For example, here's a recent announcement for Spark Energy's quarterly dividend, which pays a 7+ percent annual dividend. 

Regular Dividend of $0.1813 to go Ex: SPKE trades ex-dividend Thursday (5/30/2019) and will be payable to shareholders of record as of 05/31/2019 on 6/14/2019. 

On the flip side, if I sold the stock after the record date, but before the payment date, I'd still receive the dividend.

 For more information see this article at Investopedia, which by the way, is a great source of information.  

 Happy investing!


Labels:

Comments

Post a Comment

Popular posts from this blog

What happened when a Trump Supporter Challenged Me About the Wall

Vicky Alvear Schecter wrote in Medium | Poltics on Dec. 27, 2018 using her headline above. I thought it was pretty well written -- at least she made an attempt to keep her liberal bias out of it -- regardless of a few illogical fallacies. 

But she does make an attempt, in an effort to avoid her liberal bias, as she ponders  "...in order not to be accused by bias, I explained that I would only use conservative sources to prove my point."

To me, that's bias to start out with that premise. And I believe her premise is that she is against the wall. That's her stance. But she makes some good points, but some are skewed, even though she attempt to take a "conservative" approach, even by citing some "conservative" sources in her footnotes.

Here's the first problem: if she wanted to avoid bias, why not just stick to the the historical facts as written (when you can find them without bias), and not concern oneself with bias. "I must reject that becau…
Post a Comment
Read more

Weekly wrap for Nov 9

After Thursday and Friday, it might seem the markets are down, but the weekly numbers tell a different story, with the three major indices up for the week. The Nasdaq, with its tech exposure, had the smallest increase. The tech sector is obviously under recent pressure. 

IndexNov 2Nov 9+/-%S&P 5002,723.062,781.01+ 57.95+ 2.12%Nasdaq7,356.997,406.90+ 49.91+ 0.67%DOW 3025,270.8325,989.30+ 718.47+ 2.84%
Over the last 12 months, the Dow is up 10.77 percent, the SP 500 up 7.6 percent, and the Nasdaq up 9.7 percent.  

The weekly chart of the SPY still indicates a long position in the broader market. (The blue line is the 34-week moving average; the red is the 13-week moving average).

















While the U.S. economy still seems to be just fine from most reports, investors seemed to worry about a couple of things on Thursday and Friday: 1) The Eurozone, 2) trade with China, and 3) the Fed and interest rates. Another topic of interest has been oil. 

First, it seems that the Fed has really not indicated …
Post a Comment
Read more

U.S. Top Oil Producer, Thanks to Obama

\ You read that right.

The U.S. is now the largest oil producer in the world, according to the EIA, producing some 15 million BOE per day, surpassing Russia and Saudi Arabia. (Remember back when Jimmy Carter said in 1979 the answer to our energy problems was to wear a warmer sweater...but you probably don't. He actually said this on national TV).

The United States is the top oil-producing country in the world, with an average of 14.86 million b/d, which accounts for 15.3% of the world's production. This is down from 15.12 million b/d in 2015, but it was enough to land the United States in the No. 1 spot, which it has held for the past four years running. (Source: Investopedia.)

Guess who takes credit for it? Granted, this increase in production began in 2012, but only because of private industry and the fact that the price of oil was at nearly all-time highs. And it dipped in 2016 because of Obama's anti-oil policies! 

But here he is again: 


Former President Barack Obama sure l…
Post a Comment
Read more