Complete Stock Dividend Guide: 2023 Calendar and Fundamental Concepts

What You Need to Know About Dividends Before Investing

Dividends represent the reward received by shareholders as compensation for their investment in a company. When a company generates profits, it decides to share a portion of these with its shareholders, distributing the amount proportionally to the number of shares each owner holds. This mechanism acts as a significant incentive for investors, especially those seeking consistent returns beyond stock price appreciation.

There is a special category of companies known as “Dividend Aristocrats” that are distinguished by maintaining increasing dividend payments for at least 25 consecutive years, demonstrating financial strength and commitment to their shareholders.

Methods of Dividend Payment

Companies can compensate their shareholders in two main ways:

Cash Dividend: The most common method, where investors receive the compensation in money. This option is preferred because it provides immediate liquidity without further fragmenting ownership.

Stock Dividend: Less common, where owners receive new shares instead of cash. In these cases, purchase rights are granted that trade on the market temporarily.

Within these categories, there are three types based on the source of funds: ordinary dividend (according to normal business forecasts), supplementary dividend (when results exceed expectations), and extraordinary dividend (originating from one-time income such as asset sales).

Calendars and Critical Dates: What You Need to Know

For investors, it is essential to understand four key moments in the dividend distribution cycle, as missing any of these dates can mean missing out on the payment entirely:

Declaration Date: The moment when the Shareholders’ Meeting authorizes the distribution, establishing the exact amount, payment date, and record closing.

Record Date: Determines who has the right to receive the dividend. You must be the holder of the shares at the end of this day to claim the dividend.

Ex-Dividend Date: This is the decisive cutoff date. Those who have held their shares until this date are entitled to the payment, even if they sell the next day. Conversely, those who buy after this date will not receive the dividend in question.

Payment Date: The day when the money is actually credited to the accounts of all entitled shareholders.

Major Stocks with Dividend Calendar in 2023

Tech giants, financial institutions, and entertainment companies maintain active distribution schedules. Among the main ones are scheduled distributions for firms like Apple (ex dividend 08/04/2023, payment 08/11/2023), Microsoft (ex dividend 08/16/2023, payment 09/14/2023), financial entities with set dates, and other securities with attractive yields. This information is updated as of July 1, 2023, with the possibility of expansion as the year progresses.

Factors That May Affect Dividends

The business and regulatory environment can influence the expected payments:

Deterioration of Results: If during the fiscal year the company does not meet the financial targets set when approving the dividend, the amount may be reduced or eliminated. Since suspending payments severely penalizes the stock price, some firms choose to charge the amount to reserves instead of results, a temporary solution that does not address underlying issues.

Unexpected Risks: Significant litigation or financial stress situations can lead to a temporary suspension of dividends while the company overcomes the crisis.

Government Restrictions: As happened after the COVID crisis in Europe, governments may prohibit dividend payments in companies that received state bailouts.

Extraordinary Income: One-time gains or asset sales generate additional extraordinary dividends.

Corporate Operations: When a company makes a takeover bid, it often cancels pending dividends for reasons of financial stability.

Dividend Calculation: A Practical Formula

Calculating your dividend yield is straightforward. The first step is to determine the Dividend Per Share (DPA), which is calculated as:

DPA = Distributed Profits / Total Shares Outstanding

Once this value is obtained, you can calculate the Dividend Yield (RD):

RD = DPA / Share Price × 100

Practical Example: Imagine a company earning 10 million euros in profits and deciding to distribute 80% (8 million) among shareholders. With 340 million shares outstanding, the DPA would be €0.0235. If the share trades at €1.50, the dividend yield would be 1.56%.

Taxation of Dividends: Tax Regime

Dividends are subject to taxation as capital income. In the Spanish system, for example, cash dividends are taxed progressively:

• Up to €6,000 at 19%
• Between €6,000 and €50,000 at 21%
• Between €50,000 and €200,000 at 23%
• Over €200,000 at 26%

When dividends are paid in new shares, taxation is deferred until the sale, applying the original purchase price of the initial shares divided by the total final shares.

Withholding is automatically applied if dividends come from investment funds, or manually if directly from shareholdings.

Additional Information on Dividends

To keep your current investment strategy updated, many financial platforms such as Bloomberg, Reuters, and Infobolsa regularly publish calendars and expected dividend data, allowing you to plan your buying and selling decisions around these key dates.