When are dividends paid?

Dividends are paid on the date designated by a company's board of directors as the payment date. The board announces this date on the dividend declaration date.

If you were the holder of a company's shares at the close of trading on the day before the ex-dividend date associated with a dividend, then you will be paid the dividend. The ex-dividend date is the first date following the declaration of a dividend on which the holder of stock is not entitled to receive the next dividend payment. This is normally two days before the date of record.

If you buy shares between the ex-dividend date and the dividend payment date, then you will not receive a dividend; the dividend will instead be paid to a prior shareholder.

Dividends are authorized by a company's board of directors, which may authorize dividends once a month, quarter, or year, or possible semi-annually. Dividends are most commonly issued on a quarterly basis. If a company has paid on a certain schedule in the past, it generally adheres to that dividend payment schedule in the future, especially if it wants to attract "income investors" who hold the stock primarily because of a consistent dividend stream.

Dividends are deposited directly into your on-line trading account. Otherwise, they are received and handled by your broker, or mailed directly to you.

If a company wants to establish a reputation for consistent dividend payments, it should include information about the historical timing and amounts of its dividend payments in the investor relations section of its website.

Related Topics

Stock dividends 
Stock splits
Types of dividends
What is a final dividend?
What is an interim dividend?