I guess no one will say NO to dividend from stocks. Nonetheless, there are four dates related to dividend. These are announcement date, ex-date, entitlement date and payment date.
So which dates are important? First, let’s define them.
Four dividend dates
Announcement date
This date is also referred to as declaration date. The definition of declaration date from Investopedia is
“The date on which the board of directors of a company announces the next dividend payment. This statement includes the dividend’s size, ex-dividend date, and payment date. Declaration date is also referred to as the “announcement date.”
(Investopedia Definition Link)”
In short, this is the date when the company announces the dividend.
Ex-date
This date is also known as ex-dividend date. From Investopedia,
“The ex-date, or ex-dividend date, is the date on or after which a security is traded without a previously declared dividend or distribution. After the ex-date, a stock is said to trade ex-dividend. The ex-date is the date on which the seller, and not the buyer, of a stock will be entitled to a recently announced dividend.
(Investopedia Definition Link)”
So, to receive the dividend, we have to buy the stock before this date. If the purchase is made on the ex-date, no dividend will be received. On the ex-date, the share price will decrease by the dividend amount when the market opens.
Entitlement date
The other name for this date is the record date. Investopedia defines it as
“The record date is the cut-off date established by a company in order to determine which shareholders are eligible to receive a dividend or distribution. The determination of a record date is required to ascertain who exactly a company’s shareholders are as of that date, since shareholders of an actively traded stock are continually changing. The shareholders of record as of the record date will be entitled to receive the dividend or distribution, declared by the company. Record date is also known as the date of record.
(Investopedia Definition Link)”
This is the date when the company checks its shareholders to determine who should receive the declared dividend.
Payment date
From Investopedia,
“A payment date is the date on which a declared stock dividend is scheduled to be paid.
(Investopedia Definition Link)”
This is the date that the shareholders will receive the money.
Conclusion
Based on the information above, I think you are clear which dividend dates are important. In my opinion, the important ones are the ex-date and the payment date. The ex-date determines whether we will get the dividend or not. The payment date is the day when our bank account balance will increase. The other dates do not really warrant our attention.
