Dividends are typically paid each month or quarter. International stocks typically pay dividends annually.
Dividends must be declared by the board of directors of a company each time they get paid.
There are four important dates to remember:
This is the date the board of directors announces their intention to pay a dividend. On that day, the company creates a liability on the books and now owes the money to the stockholders. The board will also announce a date of record and payment date.
Date of Record:
This is the date on which the 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 payment. Only owner of the shares before the ex-dividend date will receive payment.
The ex-dividend date of a stock is the single most important factor to consider. In order to receive a stock’s upcoming dividend, an investor must purchase shares of the stock prior to the ex-dividend date.
This is the date the dividend will actually be given to the shareholders of record.
Do your homework as you don’t miss important dividend payments especially if the stock pays dividends periodically.
For example: If you visit: www.dividend.com, and check out Microsoft (MSFT), review the dividend information listed to get the actual ex-dividend and payment dates. Most financial websites will provide this date along with other information.