What stocks bring dividends. What are stock dividends and how do you get them? How to choose companies with high profitability
Sberbank is the largest bank in the country, it heads the category of institutions "too big to fall", so the securities it issues can be said to be super reliable and stable. Dividends accrued on Sberbank shares are one of the sources of the investor's earnings in addition to the growth of their market value.
Sberbank dividend policy in 2018
Sberbank has consistently paid dividends on its shares for many years. The previous dividend policy, approved in 2011 and expired in 2014, provided for payments of up to 15% of income.
Under the new regulation, Sberbank shares up to 50% of its profits with investors. At the same time, the procedure for calculating profit has changed - now it is calculated according to international standards (IFRS). In addition, the amount of dividends on common shares and preferred shares is set at the same level.
Profitability and profit distribution
For end investors, all of these changes in 2018 mean that payouts will increase relative to the share price. Undoubtedly, this arouses keen interest in this investment instrument of the largest bank.
Buy Sberbank shares and receive dividends, expecting an increase in the value of one security, if desired, they can always be sold at a reasonable price (there is a stable growth in quotations).
Up-to-date information about Sberbank's dividend policy and the amounts allocated for payments to shareholders is published on the bank's website page. So, it can be seen from it that a significant increase in dividends occurred at the end of 2016 and 2017 (the calculation is carried out according to the IFRS methodology):
Please note that a preliminary estimate is given for the payment of dividends for Sberbank shares for 2018 based on the dividend policy. The final amount of payments for the current year will be determined in 2019 at the meeting of shareholders.
When determining the maximum allowable amount of dividends and the percentage of benefits allocated to payments for 2018, many factors are taken into account:
- The amount of net proceeds;
- Dynamics of losses;
- The need to preserve funds for the development of the bank;
- Current quote, etc.
The latter position is important, since, in accordance with Sberbank's guidelines, payments on prefs cannot be less than 15% of the nominal value. And since, under the new conditions, dividends on both types of securities must be equal, the price of ordinary shares also affects the minimum amount of payments.
In addition, when determining the maximum amount of payments, the opinion of the Supervisory Board and directors of Sberbank is taken into account.
Due to the flexibility of the dividend policy, prompt adjustment of payments is possible. For example, in the crisis year of 2014, only 4.5% of the benefit (0.45 rubles per share in nominal terms) was distributed among shareholders, but already in 2016 the owners received 6 rubles per share (25% of the income was distributed).
At the moment, Sberbank shares have fallen in price, given that dividend payments in 2018 have ended, so it makes sense to buy securities with the expectation of 2019.
Preferred and ordinary shares
According to the regulation, Sberbank shares are divided into two categories:
- Ordinary (ticker on the Moscow Stock Exchange SBER) - give the right to make a profit, as well as vote at the annual meeting of shareholders (i.e., in fact, give the owners the right to manage the bank);
- Privileged (ticker SBERP) - do not give owners the right to vote, but dividends are distributed on them first.
Individuals who are only interested in guaranteed profits and not company management should consider buying preferred shares. Dividends on them are equal to ordinary ones, but the client will receive it one of the first.
How are the calculations
The bank's own rules define the following stages of payments:
- Holding an annual meeting (there is no specific deadline, but Sberbank usually gathers shareholders in April or May);
- Making a decision on payment;
- Publication of the decision in official sources: on the Sberbank website and in the Russian newspaper;
- Closing the register (to receive dividends for the last year, you must purchase shares before the expiration of this period);
- Direct payment.
For example, the decision to pay dividends for 2017 was made in May 2018 (while an application for voting could be submitted until May 2), and the register was closed (investors call this phenomenon a “cut-off”) on 26.06.2018. The rules for the distribution of dividends indicate that payments can be made quarterly or once every six months, Sberbank practices only annual payments (once a year).
It is convenient to keep track of meeting dates and setting cutoffs using investment calendars, for example, on investfuture.ru or on the RBC website. In addition, the same information is published on the pages of the bank's website.
The dividend payment date must be set within 10 to 25 days after the register is closed. In 2018, dividends began to be paid on 1 July. Transfers are made only in non-cash form - they are transferred to the accounts of brokers or to the bank accounts of clients (if the purchase was made on the OTC market). If money has been sent to a broker, he transfers it either to the client's brokerage account or to his bank account, depending on the terms of service.
To receive payments, it is important to have time to buy Sberbank shares for dividends - i.e. until the registry is closed. So, if in 2018 the cut-off date was set on June 22, then it was necessary to buy dividends before it. Owning shares even for one day gives you the right to receive annual payments.
Please note that trading in securities on the Moscow Exchange is T + 2. This means that the shares are credited to the client's account two days after their payment. To become a shareholder of Sberbank and have time to receive a payment, consider these conditions.
Dividend payments in 2018 and earlier
If your goal is to buy shares of Sberbank and receive dividends, then you need to analyze the history of payments and draw your own conclusions about whether it is worth counting on this type of earnings.
The year for which the payment is made | Register Closing Date | Start date of payments | SBER | SBERP | ||
Payout amount | % of profit | Payout amount | % of profit | |||
2011 | 12.04.2012 | 01.06.2012 | 2,08 | 12,84% | RUB 2.59 | 0,72% |
2012 | 11.04.2013 | 01.07.2013 | 2,57 | 15,21% | 3.20 RUB | 0,85% |
2013 | 17.06.2014 | 01.07.2014 | 3,20 | 23,58% | 3.20 RUB | 1,05% |
2014 | 15.06.2015 | 01.07.2015 | 0,45 | 4,34% | RUB 0.45 | 0,2% |
2015 | 14.06.2016 | 01.07.2016 | 1,97 | 7,85% | 1.97 RUB | 0,35% |
2016 | 14.06.2017 | 01.08.2017 | 6,00 | 23,92% | RUB 6.00 | 1,07% |
The current dividend yield on ordinary shares of Sberbank is 5.6%, preferred shares - 6.17%. The size of the profit on Sberbank shares in 2018 amounted to 12 rubles for an ordinary one and the same amount for a preferred one, which is almost twice as high as forecast.
A specific decision on dividend payments in 2019 will be made by the shareholders meeting. In the last 4 years after the change in the dividend policy, the closure of registries took place steadily in mid-June. In 2019, with the distribution of profit for 2018, the situation will most likely be the same.
Sberbank is a tax agent, therefore tax is withheld from the client's profit. For an ordinary Russian, this will be the standard income tax of 13%. So, in 2018, investors received not 12 rubles as dividends on Sberbank shares, but 10.44 rubles. penny per share. In fact, these are costs that need to be taken into account in financial planning.
In addition, some brokers have the right to withhold a withdrawal fee - pay attention to this and choose dealers without costs - otherwise the profit margin will decrease even more.
There is only one way to get tax breaks in 2018. It is necessary to open not an ordinary brokerage account, but an individual investment account, and keep funds on it for at least 3 years. After that, he will receive the right to receive a tax deduction for the entire amount of profit, and will be able to receive Sberbank's dividends in full.
How to buy securities and earn income
For owners of Sberbank shares, earnings are available through the distribution of income and exchange rate differences in speculation. During the year, you can buy and sell shares, the main thing is to be their owner on the cut-off day (don't forget about the T + 2 trading mode!). This will be enough to "gain a foothold" as a recipient of dividends. Their implementation is available immediately the next day.
You can buy Sberbank shares in 4 ways:
- Private individuals. To do this, it is enough to conclude a sale and purchase agreement or exchange and apply for amending the register to Sberbank itself or any brokerage firm. By the way, when inheriting shares, you must do the same.
- At the broker. To do this, you need to contact any brokerage office, conclude an agreement, open a depo account, transfer funds to it and give an order to the manager to purchase. The method is good if you are going to follow the "buy and hold" strategy and simply receive dividend payments on Sberbank shares. Please note that the broker does not have a commission if there are no account movements in the month, otherwise you will have to lose money just like that.
- At Sberbank itself. Come to the bank and declare your desire to purchase the issuer's securities. To do this, you will need to open an investment or brokerage account with the Sberbank Management Company and purchase shares on your own through your personal account.
- On the Moscow Exchange. To do this, you need to conclude a brokerage service agreement with any broker (even with the same Sberbank) that provides access to the Moscow Exchange, install special software on your computer or phone (MetaTrader and Quik are most often used) and leave a request to buy funds in the terminal. The advantage of this method: you can buy shares both at the market price, and leave an order in the order book to buy securities at a lower price.
The most convenient option to buy Sberbank shares is to open an individual investment account with the bank. This will save you on taxes.
The last method is the most convenient and flexible. At any time, you get the opportunity to buy and sell shares or work in the market with leverage, earning money on falling quotes. There is no need to take special actions to receive dividends from Sberbank. It is necessary to buy shares a few days before the cutoff and keep them on the day of the register close in the account. Then sell calmly: you will be recorded in the repository as a person entitled to receive payments.
Where exactly the dividends will be listed depends on the conditions of the broker. Sberbank and Otkritie send them to a brokerage account, VTB 24 - to a separate bank account.
To receive dividends when buying shares in other ways, apply for crediting funds at certain details to Sberbank itself or give the appropriate order through a broker. You can claim dividends for past years if you inherited shares but didn't know about it until you accidentally discovered it.
Conclusion
Anyone can receive dividends on Sberbank shares, in 2018 payments for the previous one are closed, now you can purchase shares for the future of 2019. The amount of payments is determined in accordance with the dividend policy and depends on many factors, mainly on the company's income. The specific amount of dividends is set by voting during the meeting of shareholders. To be able to vote, become the owner of ordinary shares of Sberbank before the closing date of the register of meeting participants. At the moment, Sberbank directs up to 20% of its profits for dividend payments, their size for both types of shares is equal. In 2018, all owners of the bank's shares received 12 rubles per security (excluding taxes).
One of the profitability factors that investors rely on when buying shares on the stock market, in addition to the growth in the market value of securities, is dividends on shares. A stock is, in essence, part of an operating business that earns a certain amount of profit. An investor who buys shares becomes a co-owner of this business and is entitled to receive a portion of this profit. And yet, what needs to be done to be guaranteed to receive dividends?
What are dividends
Dividend (from the Latin "dividendum" - that which is subject to division) - a certain part of the profit of a joint-stock company, divided among all shareholders in accordance with the number of shares, their type and share owned by the shareholders.
Not every company pays dividends, and today only slowly growing established giants such as Gazprom, Norilsk Nickel, or among foreign ones such as Microsoft, IBM, Intel, etc. can afford it.
Young, actively developing companies do not pay dividends to shareholders, and this is treated as positive factor, because all the profit goes to the improvement and development of the company, which has a good effect on the growth of quotations.
Video - what are dividends from stocks
What stocks to buy to get dividends
Shares are divided into ordinary and privileged... Ordinary ones serve directly for owning a company, receiving dividends and participating in shareholders' votes.
Preferred shares are deprived of the opportunity to participate in voting, but they have priority in the payment of dividends on shares. For example, if a company is experiencing financial difficulties, then the holders of such shares are guaranteed to receive dividend payments, while ordinary shareholders will receive nothing.
But in fact, if we talk specifically about dividends on ordinary shares and preference dividends, the situation becomes very relative. The trick is that the joint-stock company has the right to decide whether or not to pay on ordinary securities and accrual prefs. This is all very personal to each organization. It doesn't even depend on the profitability or financial condition of the company. The only indicator, as in market trading, is statistics. It is worth buying shares for dividends only if the company has been paying them steadily for many years. As they say, image is everything.
Plus, on exchanges like NASDAQ, NYSE, XETRA ... you only see common stocks. If a company pays dividends, it doesn't matter in what order you receive them from the privileged ones, because here the time difference is only a week.
The following shares are not included in dividend payments:
- Shares that have not yet been listed for sale.
- Shares on the own balance sheet of the joint stock company.
At the beginning of their formation, some companies practiced the payment of dividends not in pure cash, but in their own shares. Today this is practiced extremely rarely, both on the domestic stock exchange and on foreign ones.
The Russian market has never shone with high dividends, unlike, for example, the US market. In general, the profitability of most blue chips does not exceed 1-5% per annum. But there are also outsiders who are ready to pay their co-owners decent interest from 7 to 20% per year.
If we talk about specific examples, it is worth noting securities "", "", "", "". But these are only those securities that are "well known" and are steadily sharing their income. In general, there are about in the domestic market that may be of interest to investors.
Payment of dividends on shares
Dividend - these are very large payments, which means that they do not take place in one day. The process of transferring profit to shareholders of the company can be divided into several significant stages.
- Declaration date.First, there is an announcement of the date and amount of payment.
- Date of record.Then the register of shareholders of the company is closed. Only those who are listed in this register for that day can count on dividends. Moreover, even if a shareholder sells shares the next day, dividends will still be transferred to him.
- Payment date.Finally, the funds are transferred to the shareholders' accounts. This usually happens within a month after the registry closes.
How to get dividends on stocks
Let's say you decided the day before the dividend payment, but the dividends were not accrued at the appointed time, why? Here, too, there are pitfalls. This is due to the fact that an international delivery regime was adopted in the domestic market several years ago T + 2... It works as follows. When buying a share today, your account in the register of shareholders will only appear in two to three days.
The company's dividends are accrued according to the report, which is formed on the so-called “ cut-off date" or " closing the register". All shareholders who are in the register of shareholders at the time of the cut-off date will receive dividends.
The subtlety lies in the fact that due to the T + 2 regime, the share must be bought two days before the cut-off date, or preferably three or four, so that your data is included in the list of shareholders in the register.
The broker credits the amount due to the holder of shares to his trading account within 30 days.
A shareholder does not need to do anything to receive the money due to him: there is information about all shareholders and their account numbers in the company, which means they just need to wait for the funds to arrive in their account.
Calculation of dividends
The amount of dividends depends not only on the number, but also on the type of shares owned by the shareholder. Let's say a company has 100,000 shares in circulation, including 10,000 preferred and 90,000 ordinary. The company's net profit is $ 1 billion, the board of directors has approved only $ 200 million for dividend payments.Preferred shares have a fixed payment of $ 2,200 per share. This means that their owners need to pay $ 22 million. The remaining amount after that is $ 178 million. This amount must be distributed over the remaining 90,000 shares, that is, for each share, dividends are equal to $ 1977.
Tax
Additionally, it is worth remembering that, like any form of income, the state taxes dividends. Until January 1, 2015, their size was 9%. At the moment, it is fixed at the usual 13%. The broker, being a tax agent, automatically clears dividends from this tax.
Outcome
Earning on dividends is certainly not the main thing for investors. Even a conservative strategy can deliver higher returns than dividend payouts. Nevertheless, if you choose between bank deposits and investments in the real sector of the economy, stocks will certainly win. investing in stocks is a good helper in stable profits.
By investing in shares, you become an owner, and even if the company in which you invested begins to lose in market value, there is always an opportunity to receive the same dividends. And if we imagine such a situation that the securities will grow, the profit will be several times higher than the conservative bank deposits.
Wealthy investors understand that the dollar is the dollar, not just a percentage of the amount. Therefore, if the shares rose by 22%, it is good, but getting another 3-4% in the form of dividends is a real additional profit.
If you find an error, please select a piece of text and press Ctrl + Enter! Thank you so much for your help, it is very important for us and our readers!
How to get dividends on stocks - a question that is equally relevant for both Gazprom investors and shareholders of smaller enterprises. To successfully exercise the right to participate in the distribution of the company's profits, it is necessary to navigate the procedure for forming a dividend premium and have an idea of \u200b\u200bthe procedure for its payment. All this is outlined in this article.
What is dividend on shares
The main difference between joint-stock companies and other types of legal entities is the principle of forming the authorized capital. In a joint-stock company, it is divided into a certain number of shares, which give their owners the right to receive a share of the company's profits.
In other words, a share is one of the ways to obtain passive income, that is, dividends, provided that the development of the organization that issued it is positive.
However, making a profit by an enterprise is by no means a guarantee that the shareholders will receive dividends due to them: it is highly likely that the income received will be invested in business development, if such a decision is made by the general meeting of shareholders.
The decision on the use of profit is made by voting, while votes are taken into account in proportion to the number of shares in one hand - that is, the opinion of 1 owner of 500 shares is more significant than the points of view of 5 JSC members, each of which has 20.
Formation of a dividend premium: how to calculate the amount of dividends
According to the Law "On the Securities Market" No. 39-FZ dated April 22, 1996, joint stock companies have the right to issue two types of shares:
- ordinary (simple) - giving the holder the right to participate in the management of the company and the distribution of profits;
- privileged - allowing the shareholder to receive stable passive income, that is dividends on shares, without the right to manage the society.
Dividends on preferred shares can be established in a fixed amount or in percentage terms in relation to the par value of a security - in any case, their size or form of calculation must be spelled out in the charter of the joint stock company.
When calculating the amount of dividends on ordinary shares, the following formula is applied:
∑(d) = (G - PA) / Qa
∑(d) - the size of the dividend on ordinary shares;
G - profit to be distributed;
PA- dividends on preferred shares;
Qa- the number of common shares.
An example of dividend calculation
The profit of the joint-stock company to be distributed for the reporting period amounted to 100 thousand rubles. The authorized capital of a JSC includes 20 preferred and 500 ordinary shares with a par value of 1,000 rubles each, distributed as follows:
Don't know your rights?
Ivanov - 390 ordinary shares;
Petrov - 10 common and 5 preferred shares;
Kuznetsov - 15 preferred shares;
Vasiliev - 100 ordinary shares.
According to the charter, dividends on preferred shares are charged at the rate of 10% of the par value.
Dividends per 1 preferred share are 100 rubles (10% of 1000). The total amount of dividends is 2,000 rubles (20 shares x 100 rubles).
Thus, the amount of dividends per 1 ordinary share is 196 rubles: (100,000 - 2,000) / 500 \u003d 196.
That is, shareholders receive the following amounts (before deducting tax of 9%):
Ivanov - 76,440 rubles (390 x 196);
Petrov - 2,460 rubles (10x196 + 5x100);
Kuznetsov - 1,500 rubles (15 x 100);
Vasiliev - 19,600 rubles (100 x 196).
Important: dividends are not charged on the following groups of shares:
- being on the balance sheet of a JSC based on a decision of the board of directors or a general meeting of shareholders (for example, shares redeemed from previous holders);
- transferred to the company in connection with the non-fulfillment of the shares by the buyer of payment obligations.
How to get dividends on stocks
According to the law "On joint-stock companies", the frequency of payment of dividends must be fixed in the company's charter. As a rule, this is 1 year, but it is allowed to set quarterly or semi-annual periods.
The procedure is carried out in several stages.
- Making a decision on the payment of dividends.
The decision is taken by the general meeting of shareholders at the suggestion of the board of directors of the company. Attendance at the meeting is optional, it only matters for large package holders and active participants in the management of the company. At the same time, the date of closing the share register and the direct payment of dividends are approved.
- Establishing an ex-dividend date.
The ex-dividend date, that is, the date on which the shares must be held in order to be eligible to receive a share of the profits, cannot be set before the time of payment is approved.
Important: in order to qualify for dividends, shares must be purchased a maximum of 2 days before the register is closed.
- Closing the share register.
Formation of the final list of shareholders entitled to receive dividends.
Important: only holders of shares entered in the register no later than 2 days before its closing will be able to make a profit.
- Payment of dividends.
The actual payment period cannot exceed 25 days from the onset of the ex-dividend date.
For individuals dividends on shares can be listed in several ways:
- transfer to a brokerage account;
- transfer to a personal bank account;
- postal transfer;
- cash withdrawal.
The first method is most often used today, since most investors buy stocks through brokerage transactions. However, the absence of an account opened in a licensed brokerage company in no way can become an obstacle to receiving money: the main thing is that all the details of the recipient coincide with his data as of the date of dividend payment. This is of great importance, since a share of the profits, as a rule, goes to a personal account, by mail or in cash, to holders who purchased shares in the 90s of the last century, when brokerage services were not yet so in demand.
Dividend — this is a part of the profit of the joint-stock company paid by it on the issued shares in accordance with the decision of the general meeting; this is the income of the owner of the share, which is transferred to him by the joint-stock company in the manner established by this company.
After payment in favor and deductions to obligatory funds, it is used in two directions: expansion of activities (reinvestment) and on payment of dividends... The size of the latter depends on the results of the work of the joint-stock company, that is, the size of the profit it earned and the dividend policy it pursues. On average, usually half of the company's net profit is spent on paying dividends, the other - for the needs of the company itself. If a society is developing rapidly, then the share of dividends in net income is usually small. If the market price of a share is experiencing a downward trend, then one way to overcome the latter is to increase the amount of dividend income per share.
The decision on the payment of dividends and their final amount is taken by the general meeting of shareholders, but it is not entitled by law to increase the amount of the dividend recommended by the board of directors of the joint-stock company.
Formation and payment of dividend
Dividend - this is the net profit of a joint-stock company per one share at the end of the current year, distributed among shareholders in proportion to the number of shares of the corresponding categories and types they hold.
The dividend is set in monetary terms or as a percentage of par.
In accordance with the law "On Joint Stock Companies", the dividend cannot exceed the amount recommended by the board of directors (supervisory board) of the joint stock company.
Types of dividends
Dividends paid by a joint stock company can be classified into various types depending on the classification characteristics used:
Classification characteristics | Types of dividends |
Stock category |
Ordinary promotions:
Benefits privileged shares:
|
Payment period |
|
Payment method |
|
Payment amount |
|
on which dividends are accrued
Dividends are accrued and paid only on those shares that are in the hands of shareholders and are fully paid by them.
Shares for which dividends are not accrued. For some groups of issued (placed) shares, dividends are not charged.
Shares for which dividends are not accrued or paid:- Not placed (not released into circulation)
- Purchased and on the balance sheet of a joint stock company by decision of the board of directors
- Purchased out and on the company's balance sheet by decision of the general meeting of shareholders or at their request
- Received by the company due to non-fulfillment by the buyer of obligations to purchase them
The decision of the meeting of shareholders on dividends. In accordance with the law, a joint-stock company may decide on full or partial payment of dividends or on their non-payment based on the results of the reporting year.
The law establishes situations in which it cannot make a decision on the payment of dividends.
The decision to declare annual dividends cannot be made:- Until full payment
- If the requirement for the amount of the net asset value is not met
- Before redemption of all shares at the request of shareholders
- If there are or appear as a result of the payment of dividends signs of bankruptcy of the joint-stock company
Dividend recipients
A dividend can be paid both to shareholders and to nominee shareholders entered in the register of shareholders of the company in accordance with the established procedure.
If there is a nominee holder in the register of shareholders, then dividends are accrued to him, and he is responsible for transferring the accrued dividends to his depositors (specific shareholders).
If, after the date of compiling the list of persons entitled to dividends (the date of the register closing), shares or part of them are sold to another person, the right to dividends remains with their previous owner. In this case, the acquirer is entitled to receive dividends only on the basis of a power of attorney issued by the seller, included in the list of persons entitled to dividends.
Priority of dividend payment
Dividends in a joint stock company are set and paid separately for preferred and ordinary shares.
The holder of a preferred share has an advantage in receiving dividends over the holder of an ordinary share.
In turn, the holders of different types of preferred shares may have a different order in their receipt. According to the Law "On Joint Stock Companies", dividends are primarily paid on those preferred shares that give the owners an advantage in the order in which they receive dividends. If the financial conditions of the joint-stock company allow the payment of dividends for this type of shares, the possibility of paying dividends on cumulative shares, on which dividends were not paid in previous periods or were paid in part, is considered. If dividends can be paid on the listed two types of preferred shares, the possibility of paying dividends on preferred shares for which the size of the dividend is determined by the company's charter is considered. Then a decision can be made to pay dividends on preferred shares for which the size of the dividend has not been determined. And last of all, a decision is made to pay dividends on ordinary shares.
Authorized capital of 1 billion rubles. divided into preferred shares (25%) and ordinary (75%) with the same par value of 1,000 rubles, ie, only 1 million shares. The dividend on preferred shares is set at 14% of the par value. What dividends can be declared on shares, if the board of directors recommends to allocate 110 million rubles for the payment of dividends? net profit?
- Calculation of dividends attributable to preferred shares: 1,000 rubles. * 14/100 \u003d 140 rubles. per share, only 140 rubles. * 250,000 shares \u003d 35,000,000 rubles.
- Determination of net profit that can be used to pay dividends on ordinary shares: 110 million rubles. - 35 million rubles. \u003d 75 million rubles.
- Calculation of dividend paid per one ordinary share: 75,000,000 rubles. : 750,000 shares \u003d 100 rubles, or 10% of the par value of 1000 rubles.
Form of payment of dividends
A dividend may be paid in money, and in cases stipulated by the charter of the company, other property, as a rule, shares of subsidiaries or own shares.
If dividends are paid in own shares, then this practice is called capitalization of income, or reinvestment. In world and Russian practice, the payment of dividends in own shares is quite common. In this case, the dividend is established either as a percentage of one share, or in a certain proportion, taking into account the date of their acquisition (for example, 4 shares for 10 shares previously acquired during the year of ownership or 1 share for 10 previously acquired shares for 1 full quarter of ownership).
Income capitalization modelThe theoretical share price in this model is based on the fact that it is the sum of discounted dividends paid on it.
If approximately the same dividend is paid on a share every year (period), as is the case, for example, in preferred shares, then the above formula is greatly simplified:
If a dividend is paid on a share, the amount of which increases annually by the same small percentage, then formula 2.1 takes the form:
The main problem of this model is to predict the size of the dividend, which, under the influence of a variety of reasons, usually does not remain the same and its future size can only be discussed over a relatively short period of time, usually calculated in months;
An example of calculating the payment of dividends in shares, or capitalization of incomeSuppose that 20 shares were purchased on 05/10/04, the decision to pay dividends in the form of own shares was made on 02/20/05 at the rate of 4 shares for 10 acquired in a full year of ownership: 20 shares / 10 shares * 4 shares * 9 months. / 12 months \u003d 6 shares (since there are 9 full months of ownership).
Terms of payment of dividends
The term for the payment of annual dividends can be determined by the charter of the company or by a decision of the general meeting of shareholders on the payment of annual dividends. If the date of payment of annual dividends is not determined by the charter of the company or by a decision of the general meeting of shareholders, the term for their payment should not exceed 60 days from the date of the decision to pay annual dividends.
If the decision to pay dividends is made, then their payment becomes the responsibility of the joint stock company.
However, the Law "On Joint Stock Companies" establishes that a company cannot pay declared dividends on shares if on the date of payment:- the company meets the signs of insolvency (bankruptcy) or they will appear in the company as a result of the payment of dividends;
- the value of the company's net assets is less than the amount of its authorized capital, reserve fund and the excess of the liquidation value of placed preferred shares, determined by the charter, over their par value, or it will become less than the specified amount as a result of the payment of dividends.
Upon termination of the above circumstances, the company's obligations to pay dividends will resume.
Taxation of dividends
The joint-stock company is an agent for the collection and timely transfer of taxes withheld from dividends to the budget.
Upon payment of accrued dividends, the joint stock company withholds taxes.
Procedure for payment of dividends in a joint stock company
To determine the procedure for the payment of dividends, the joint-stock company develops and approves at the general meeting of shareholders a special provision on the procedure for calculating and paying dividends of the joint-stock company. The key issues when deciding on the payment of dividends are the form of payment of dividends, their size and payment date.
Dividends are part of the profit of a joint stock company, which is distributed among shareholders. Dividends are paid out of profit only. At the same time, even if there is profit, the decision to pay or not to pay dividends should be made by the general meeting of shareholders by a majority vote.
What does it mean? If the company did not make a profit in some year, it means that there was nothing to pay dividends from, and, accordingly, dividends for this year were not accrued or paid. But even if the company made a profit, then there is a possibility that some shareholders did not want to receive dividends this year, but wanted to direct the profit to the development of the enterprise. And if such shareholders were the majority, then it is possible that the majority of votes at the meeting of shareholders made decisions not to accrue and not to pay dividends, respectively, dividends were not accrued or paid. In connection with the above, a situation is possible when some issuers paid (and are paying) dividends every year, some issuers pay dividends from time to time, and there are also such issuers who have never accrued or paid dividends at all! How do you know if your issuer has paid dividends over the past years and what is their size? The simplest thing is to look for this information on the issuer's website. Public joint stock companies are required to disclose information about dividend payments for all past years, and publish this information on the Internet. But even if you cannot find information on the Internet, you always have a second way - call the company itself (as a rule, the shareholder relations department) - they will be happy to tell you what dividends, for what years and in what amount were accrued and paid for every one share. Based on this information, knowing the number of shares you have, you can estimate the amount of payments due to you by year.
Suppose the simplest option is to find out that “dividends have never been accrued or paid. This means that there is nothing to receive for all the years, alas.
But let's consider a more complicated second option - dividends were accrued, paid, but for some reason they did not reach you. How to be in this case?
As a rule (99.999% of cases) dividends do not find an addressee for a simple reason: the shareholder's questionnaire contains incorrect details of the shareholder himself. Providing the correct details and updating them on time is the responsibility of the shareholder, not the issuer. In any case, the issuer sends dividends to those details that he has - he does not care whether they are correct or incorrect. If the details are complete and correct, the shareholder receives dividends. If the requisites are incorrect, incomplete, or none at all, then dividends either cannot be sent to him or cannot reach such a shareholder. Such "unclaimed" dividend amounts are returned to the issuer's balance sheet. According to the general rule of dealing with accounts payable, the issuer keeps unclaimed amounts for 3 years, and then turns them into its own income, into the issuer's income. Therefore, even if dividends were accrued for all the past years, but you have never received them, then it is very likely that, realizing yourself only now, you will be able to receive dividends, at best, only for the last 3 years!
Are there any exceptions to this rule? Yes, there is a rare exception. The fact is that when filling out the shareholder's questionnaire during privatization, the shareholder had to indicate the surname, name, patronymic, passport data, registration address and how he wants to receive dividends. There were three ways to receive dividends: “by postal order”, “in cash at the office”, “to bank details”. If incomplete details were indicated in the questionnaire - say, there was no surname or patronymic or there was no passport data - then dividends could not even be sent to such a shareholder, no matter what method was indicated for receipt (just for information, such shareholders with flaws in the full name or passport data, "unidentified persons" are called) But even if, say, the shareholder's surname, name, patronymic and passport data were correctly indicated, but the shareholder indicated the address incorrectly and at the same time indicated that he wants to receive dividends by "postal order" - then such dividends were sent to the shareholder, but did not find the addressee, and were returned to the issuer (and after three years turned into the issuer's income). Or let's say you indicated the method by "postal order" and then changed your registration - in this case, dividends were also sent, did not find you, and returned. Or, for example, you indicated the method of receiving "cash at the checkout" - but did not appear at the checkout. Such dividends were transferred to the cashier, did not wait for you, returned to the issuer ... then you know.
Of these sad examples, only one exception is possible: if once upon a time, initially when filling out the questionnaire, you indicated the method of receiving dividends not by "postal order", not "personally at the registrar", but indicated that you want to receive dividends "TO THE BANK ACCOUNT" , and at the same time it is CORRECT that you indicated the details of this account and your own. So, only in this rare case, dividends were sent to you, happily credited to this very bank account, and now they are waiting for you there, in the bank account. Most of these happy occasions are among the shareholders of Gazprom, who transferred their shares for safekeeping to the Gazprombank depository (because by default, when filling out a questionnaire, they were offered to receive dividends on a “demand” account in the same Gazprombank). Among the shareholders of other issuers, such happy accidents are extremely rare. In 99% of cases, people wrote in the questionnaire “I want to receive cash” and at the same time made mistakes in the details.
But suddenly you are lucky and you are just that lucky! - so do not be lazy, call (or better reach) the registrar, find out finally and exactly what is with your dividends for all the years, how and where they were listed, where they are now. If the dividends are waiting for you, take them away.
Theoretically, another miracle is also possible: the issuer did not want to convert your money into his own income, and carefully keeps it for you! 🙂
But even if this is not the case, even if you had the wrong details, you still need to contact the registrar to update the details in order to receive dividends for the last three years and receive in the future! So, in practice, in any case, in order to clarify and resolve the issue of dividends, you will have to contact the registrar.
And everything written above, I hope, will help you understand the theoretical side of the problem in order to speak the same language with the registrar.
_____________________________
Other useful articles about the theory and practice of calculating dividends can be found on our website here