A dividend is a portion of a company's profits that is regularly distributed to its shareholders.
The amount each shareholder receives depends on how many shares they own. For example, if a company pays $0.80 per share and you own 50 shares, you would receive $40.
There are four key dates involved in dividend payments:
- Declaration Date: The day a company announces it will pay a dividend. It also shares the dividend amount, the ex-dividend date, and the payment date.
- Ex-Dividend Date: The date when the stock is traded without the upcoming dividend. Only those who owned the stock before this date will be eligible to receive the dividend.
- Record Date: The day the company identifies who qualifies for the dividend. It usually comes one business day after the ex-dividend date.
- Payment Date: The actual day the dividend is paid to eligible shareholders.