DIVIDENDS ARE CONSIDERED THE MOST IMPORTANT CORPORATE ACTION AND MOST COMMONLY USED BY ANY CORPORATE TO KEEP THE SENTIMENTS POSITIVE AMONG SHAREHOLDERS AND POTENTIAL INVESTORS. IT IS ALSO A METHOD THAT THE MANAGEMENT ADOPTS TO REWARD THE SHAREHOLDERS.
Dividends are an important source of earnings from the stock markets. In my career, I have seen complete portfolios being built around companies that pay a healthy and consistent bonus. Many investors believe it is a sign of strength to be able to able to continuous and sustainable dividends. Here we provide you with the upcoming dividends ex-dates till 15th June 2017. All investors should have these on their watch list. A dividend is a distribution of a portion of a company’s earnings, decided by the board of directors, to a class of its shareholders.
Cash Dividends- Regular cash dividends are those paid out of a company’s profits to the owners of the business (i.e., the shareholders). A company that has preferred stock issued must make the dividend payment on those shares before a single penny can be paid out to the common stockholders.
Special One-Time Dividends –In addition to regular dividends, there are times a company may pay a special one-time dividend. These are rare and can occur for a variety of reasons such as a major litigation win, the sale of a business or liquidation of a investment. They can take the form of cash, stock or property dividends.
When Do Dividends Get Paid?
Dividends must be declared (i.e., approved) by a company’s Board of Directors each time they are paid. There are four important dates to remember regarding dividends.
- Declaration date: The declaration date is the day the Board of Directors announces their intention to pay a dividend. On this day, the company creates a liability on its books; it now owes the money to the stockholders. On the declaration date, the Board will also announce a date of record and a payment date.
- Record Date: The date of record is the date on which a company reviews its records to determine exactly who its shareholders are — an investor must be a “holder of record” in order to receive a dividend payout. A stock will almost always begin trading ex-dividend (or “ex-rights”) the second business day before the record date. In other words, only the owners of the shares on or before the ex-dividend date will receive the dividend. If you purchased shares of RELIANCE on or after the ex-dividend date, you would not receive its upcoming dividend payment; the investor from whom you purchased your shares would.
- Ex-dividend Date: The ex-dividend date of a stock is the single most important date for dividend investors to consider. To receive a stock’s upcoming dividend, an investor must purchase shares of the stock prior to the ex-dividend date. Usually in India, the Ex-dividend date one day before the record date or the BC End Date. This is so, because in India the settlement takes T+1 days and in order for investors to have their names in the records the stock must be purchased prior to the ex-dividend date.
- Payment date: This is the date the dividend will actually be given to the shareholders of company.
- Many times the Record date is not given. Instead, the corporate may announce a BC Start date and End Date. BC Stands for book closure and this is the period defined by the corporate to determine which shareholders will be rewarded dividend.