The main mode of profit in the Stock Market is buying a stock at a low price and selling when the price rises. However, there is another way to profit in the Stock Market and that is through Dividends.
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How do I know if the Stock is giving Dividends?
No one really knows, it totally depends on the company's performance for a certain period. If the company is doing well, the Board of Directors may give incentives to its part-owners, be it as Stock Rights or Dividends.
Is there a fixed dividend schedule?
It depends on the Board of when they will schedule a dividend. However, if they do, they will post it on the Philippine Stock Exchange's calendar. You can check their website for the dividend schedule.
What are these three (3) dates?
This is where the fun starts.
Ex-Dividend Date
- Stock owners who bought shares before this date is entitled for a dividend.
- Even if you sell your shares on the Ex-Div Date, you will still receive dividend from the company.
- The company's stock price will usually dip during this date because of the selling spree.
Record Date
- This is the date where the company submit its list of shareholders for reporting purposes.
- This date holds no bearing to your dividend entitlement. Even if you sell the stock, as long as it is bought before the Ex-Div Date, you will still receive a dividend.
- The record date come after or several days after the Ex-Div Date.
Payment Date
- Very self explanatory - this is the date of payment.
- Dividend amount received is taxable.
Now that you know the role of each date. You are now equipped with the knowledge to fully utilize the power of dividend investing. Obviously, the Ex-Dividend Date is the most important date to track.
Next time you buy a stock with the intention of getting dividends don't ever forget to check the three (3) dates. More importantly the Ex-Div Date.
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