Dividend Payment Dates: Know When You Are Getting Paid

Do you own shares in solid dividend paying companies? Dividend payment dates will effect when you get your share of the profits as an owner...

The dividend pay date is the day when the dividend gets deposited into your account... cash money!  It is also the last in a series of important dividend dates that you should be aware of as a shareholder in a company.  After the Board of Directors declares the distribution to the public and it goes ex dividend, the payment is usually made a few weeks later...

The only catch is that you must purchase your shares before the ex dividend date to be entitled to the upcoming payment.

Here is an example of how the dividend typically comes to be...

On August 28th after releasing financial results for the 3rd quarter, XYZ Financial’s Board of Directors declared a quarterly dividend payment of $0.63 per share.  The dividend will be payable on October 29, 2012 to shareholders of record on October 2nd, 2012, with an ex-dividend date of September 28th, 2012. 

So the pay date in this case is October 29, 2012 and it usually occurs a few weeks after the dividend record date.

So as long as you purchased shares in XYZ Financial on September 27th or any time before, then you would receive the dividend payment on October 29th.  If you purchased shares on September 28th or after then you wouldn’t get the dividend cheque.

Some companies pay dividends every quarter, while others pay monthly and some pay yearly!  As a long term investor, compounding through dividend reinvestment can be accelerated with more frequent payments... just watch your transaction costs.  Click here to learn how we keep costs in check when purchasing high paying dividend stocks.

So there you have it... you are now no stranger to dividend pay dates.  Let’s keep learning!

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