There are three key dates to know when it comes to dividends: the declaration date, the ex-dividend date and the payment date. When Are Dividends Paid?ĭividends may be paid on a monthly, quarterly or yearly basis, depending on the company. A stock dividend functions essentially like an automatic dividend reinvestment program (more on that below). You can sell these dividend shares for an immediate payoff, or you can hold them. Stock DividendsĪ stock dividend is a dividend paid as shares of stock instead of cash. Its regular quarterly dividend rate remained 13 cents per share. For example, Microsoft paid a one-time dividend of $3 per share in 2004, equal to $32 billion. Special dividends are not a commitment by a company to continue offering dividend payment at that rate. Special dividends might be one-off payouts from a company that doesn’t normally offer dividends, or they could be extra dividends in addition to a company’s regularly scheduled dividends.Ĭompanies generally announce special dividends when they’ve been especially profitable and want to share earnings among shareholders. Special DividendsĪ special dividend is a one-time bonus dividend payment. Preferred stock generally has a stronger claim to dividends than common stock, for instance.
Preferred and common stock, as well as different classes of stock, typically earn varying dividends or none at all. Special dividends are paid on an irregular basis.Įven among companies that do pay dividends, not all shareholders are eligible to receive them equally. If a company chooses to pay dividends, they may be distributed monthly, quarterly or annually. Dividends can be cash, additional shares of stock or even warrants to buy stock.īoth private and public companies pay dividends, but not all companies offer them and no laws require them to pay their shareholders dividends.
When a company pays a dividend, each share of stock of the company you own entitles you to a set dividend payment. Dividends are how companies distribute their earnings to shareholders.
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