Before a company can pay cash dividends to shareholders, it has to go through a legal checklist that includes declaring a declaration date, ex-dividend date, date of record, and distribution date.
As an investor, you need to know what these represent.
Clear off your desk, grab a pen and notepad, and get a cup of coffee.
You're about to embark on a journey that will put you years ahead of other new investors on understanding dividends and the important role they plan in your investment portfolio.
By starting here, you'll learn to avoid tax traps such as buying dividend stocks between the ex-dividend date and the distribution date, effectively forcing you to pay other investors' income taxes!
You'll also learn why some companies refuse to pay dividends, how to calculate dividend yield, and how to use dividend payout ratios to estimate the maximum sustainable growth rate.
Cash dividends literally represent money sent to you in the mail or direct deposited into your bank account.
The goal of successful investing is to be able to have cash dividends pour into your life regularly so you don't need to work unless you desire.There are three important dates to remember regarding dividends.A vast majority of dividends are paid four times a year on a quarterly basis.That's why I put together this step-by-step Dividends 101 resource.It will walk you through the basics, ensuring that you have a solid foundation before diving into the more practical content in our Ultimate Guide to Dividends and Dividend Investing.John Shaw, Getty Images Cash Dividends Regular cash dividends are those paid out of a company’s profits to the owners of the business (i.e., the shareholders).