Dividend Dates Explained – Must Know Dates for Dividend Investors!

By Trader Pit

July 7, 2021


Dividend dates can be confusing, but understanding when the next dividend is paid can be very important for dividend investors. You can find the actual date of each dividend by either looking up the date in the latest proxy statement or by viewing the company’s dividend history.

The dividend date is somewhat confusing for dividend investors, so we’ve put together a list of dividend dates and their meanings for quick reference.

Dividend dates explained to beginners – Understanding important dividend dates : Many investors in the stock market buy stocks just to earn dividends. Regular, consistent and annually increasing dividends is what these investors are looking for. In general, these investors invest for the long term and receive regular dividends.

However, if you are considering earning dividends or simply receiving dividends by holding multiple stocks, there are a few important facts you need to understand. For example, when exactly will you receive the dividend? In this overview of dividend dates we cover all the important dividend dates a dividend investor needs to know. Let’s get started.

What is a dividend?

Before going into the dividend payment dates, it’s a good idea to familiarize ourselves with the basics so everyone is on the same page.

Dividends are a portion of a company’s profits that are paid out to shareholders. Here the decision on the amount of dividend to be paid is taken by the company and the key person on the board of directors.

Dividends are not binding on companies. Loss-making companies obviously do not make profits and therefore cannot pay dividends. Moreover, growing companies can even reinvest all their profits in their growth and not pay dividends to their shareholders. However, stable and mature companies typically pay their shareholders decent dividends.

For example, here is a list of recent dividends from several large Indian companies:

 

COMPANY NAME Div Type Divorce (%) no dividend
Infosys Final 300 31-05-2021
CRISIL Intermediary 700 05-05-2021
Builder of stoves Final 220 03-05-2021
Angel Broking Intermediary 75 29-04-2021
HCL Technology Intermediary 300 29-04-2021
HCL Technology Special 500 29-04-2021
Nestlé Final 650 29-04-2021
Nestlé Intermediary 250 29-04-2021
Easy walk Intermediary 100 27-04-2021
Castrol Final 60 22-04-2021
Muthoot Finance Intermediary 200 22-04-2021
ABB India Final 250 19-04-2021
Britannia Intermediary 6200 08-04-2021
ACC Final 140 30-03-2021
Colgate Intermediary 2000 30-03-2021

Also read: 10 best dividend stocks in India that will enrich your portfolio.

The most important factor with dividends is when you buy and own the stock. You don’t want to buy the stock if you don’t get the dividend, do you? If you hold these shares for e. B. after a certain period of time to buy, the previous seller can receive the dividend because he owned the shares when the company fixed the dividend.

So it is very important that you know the dates when a company pays dividends. In these announcements, the company explains the amount it will distribute to shareholders and the dates on which shareholders will receive their dividends.

Explanation of dividend payment dates Dates mandatory for investors

There are four key dividend payout dates that every investor should be aware of. These include:

  1. Date of dividend declaration
  2. Date of entry
  3. Ex-dividend date
  4. settlement date

Of these four days, the ex-dividend date is the most important. You will understand the importance of this date by continuing to read this article on dividend payment dates. In the meantime, let’s get all these appointments settled first:

1. Date of dividend declaration

This is the date on which the company pays dividends to shareholders. The conference will include the date the dividend is paid, the amount of the dividend, the amount of the dividend that shareholders will receive for each share they own, and the record date.

2. Reference date

On the day the dividend is declared, the company will announce the record date. The record date is the date on which your name must appear on the company’s list of shareholders, i.e. the registration book, to receive a dividend.

Shareholders who are not included in the books of the company before this date will not receive any dividend. According to the company, you are only entitled to dividends if your name is on their account before this deadline.

3. Ex-dividend date

The ex-dividend date is usually two days prior to the record date. To receive the dividend, you must purchase the shares before the ex-dividend date. If you buy shares on or after the ex-dividend date, you will not receive a dividend, but the previous seller will receive the dividend.

When a company sets a record date, the exchange also sets an ex-dividend date. These two days before the registration date are usually used by the stock exchange to communicate the names of the shareholders of the company. Investors who purchase shares on or after the dividend payment date are not included in the company’s ledger. So if you buy a stock on or after the ex-dividend date, you will not receive a dividend until the next dividend is announced for the next period.

4. Dividend payable

This is the date set by the company on which the dividend is paid to shareholders.

Only shareholders who have purchased shares before the ex-dividend date are entitled to receive dividends. Therefore, as mentioned earlier, the ex-dividend date is the most important of all dates.

The following is a summary of the dividend payment dates shown above:

 

Data Target
Date of declaration The company announces the payment of dividends on this date
Ex-dividend date The date you must hold the shares to be entitled to the dividend.
Date of entry The date you must be registered as a shareholder on the company’s books to receive a dividend.
settlement date Date of dividend payment to shareholders.

Example of a data-sharing declaration

I will now give you an example of a company’s dividend announcement so that you can understand how the above dividend payment dates are explained. Announcement of ITC interim dividend :

 

Short note
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The Board of Directors of ITC Ltd in its meeting held today declared an interim dividend of Rs. 5.00 per ordinary share having a par value of Re. 1/- for the year ended December 31. March 2021, which will be paid on Wednesday, March 10, 2021 to the members entitled to it. The Board of Directors also met on Tuesday, February 23, 2021, as the record date for determining the eligibility of members to receive this interim dividend.

In its abovementioned comments, the company raised several important points

  • Dividend = ₹5,00 per share
  • Deadline: 23. February 2021
  • Payment date = 10. March 2021

The expected ex-dividend date is 21 February 2021, which means that investors who bought (or held) ITC shares before that date will be entitled to receive the dividend.

If you want to know the dates of the upcoming dividend payments, you can also do so on Money Control’s website using this link.

That was it for this post on dividend dates. I hope this was helpful to readers. If you have any doubts or need help explaining the dividend payout dates, feel free to leave your comments below. I’d like to help you. Have a great day and make good investments.

Hello, my name is Kritesh (Tweet me here), I am a certified fundamental equity analyst with NSE and an electrical engineer (NIT Warangal) by profession. I am passionate about stocks and have spent the last four years researching, investing and teaching people how to invest in the stock market. That’s why I like to share my knowledge with you. #HappyInvesting

Frequently Asked Questions

What dates are important for dividends?

Dividends are paid out on the following dates: Quarterly: January, April, July, October Semi-Annually: April, July, October Annually: January, April, July, October

What are the 3 important dates for dividends?

The 3 important dates for dividends are: Dividend payment date Ex-dividend date Record date

How do dividend dates work?

Dividend dates are the dates when a company’s shareholders are paid a dividend.

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About the author

Trader Pit

A yogi who like Finance and Technology. I have been in Indian Stock market for over 12 years now as financial analyst, portfolio manager, trader. Now, I focus on Yoga, Financial Education & Long term investing. 

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