A dividend is a share of a company's profit paid to its owners, usually once or twice a year. Banks, telecoms and property trusts tend to pay more of their profit out; younger, growing companies often pay little and reinvest instead.
Three dates matter. The announcement date, when the board declares the dividend; the qualification date, when you must hold the shares to receive it; and the payment date, when cash reaches your bank account.
The yield is the yearly dividend divided by the share price. A very high yield can be a warning: it often means the price has fallen because the market expects the dividend to be cut.
A high yield is a question to ask, not an answer.
Reinvesting dividends, buying more shares with each payment, is how many long term investors build wealth. Our calculator shows the effect with example numbers.
Dividends are taxed at source in many cases, and the company pays the net amount. Your annual statement from us lists every dividend received and any tax deducted.
