How Often Are Dividends Paid?

by Tim Plaehn ; Updated July 27, 2017

Historically up to 40 percent of the stock market's total return over time is its cash dividends. The best source for distribution dates is the company's website under the investor information heading. If the company does not have a dividend history page, find dates by going through news releases and quarterly earnings reports.

Definition

Dividends are payouts of a portion of a corporation's income to stock holders. The income paid by some types of stock-like securities is not officially a dividend and will be classified as a distribution. Payment of dividends and distributions works the same.

Time Frame

Stock dividends can be paid annually, semi-annually, quarterly or monthly. Most U.S. companies use a quarterly distribution. Many international companies pay dividends only once a year.

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Identification

Dividends are not paid the same date every quarter. They can fluctuate a few days in the payment month, and the gap between payment dates for quarterly dividends can be significantly more or less than three months.

Features

Three dates are important for dividend payments. The record date is the day you must have ownership of the shares to be paid a dividend. The ex-dividend date is two trading days before the record date; you must have purchased the shares before then. Payment date is when the dividend money is paid--a few days to a couple of weeks after the record date.

Warning

The share price of the stock will drop by the amount of the dividend on the ex-dividend date. If the stock was $20 the day before and the dividend is $1, the price will open on the ex-date at $19. Shareholders on the ex-date will get the dividend, so their value is the $1 plus $19 equals $20.

About the Author

Tim Plaehn has been writing financial, investment and trading articles and blogs since 2007. His work has appeared online at Seeking Alpha, Marketwatch.com and various other websites. Plaehn has a bachelor's degree in mathematics from the U.S. Air Force Academy.

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