Buying shares Affordable Buying dividends

Buying shares Affordable Buying dividends: Dividends are part of the profits of the companies, which the general meeting of shareholders decides to distribute among its partners.
Dividends are an economic right that shareholders of companies have, not an obligation.
Companies do not have to pay dividends. Many companies, in particular the so-called growth companies, do not pay dividends to their shareholders.
The reason is simple: the profit obtained is reinvested in the company in order to generate more value for the owners.

What are dividends?

Dividends are part of the profits of the companies, which the general meeting of shareholders decides to distribute among its partners.
Dividends are an economic right that the shareholders of the companies have, not an obligation.
Companies do not have to pay dividends. Many companies, in particular the so-called growth companies, do not pay dividends to their shareholders.
The reason is simple: the profit obtained is reinvested in the company in order to generate more value for the owners.

Growth companies and mature companies

In this way, we can make two company layouts:
Stable, mature companies with less growth capacity, which compensate their shareholders by paying dividends. They are revenue-generating companies.
They are usually companies that have matured within their sector and the management does not have the opportunity to reinvest in the company so that it can grow further, in these cases they distribute the profits to their shareholders.
Their price increase is generally much smaller, but investors are compensated with a constant cash flow per year.
On the other hand, we have young companies, with a market that continues to expand. They are the growth companies, which usually do not pay dividends, because the generated profits are reinvested in the company itself.
Their prices fluctuate much more, especially upwards.
We may find ourselves in the case of growth companies, which distribute part of their profits as dividends and use the rest to grow.
When dividends are paid
The dividend is paid once a year.
When we see companies paying half-yearly or quarterly dividends, they are in fact payments or interim dividends of the total dividend.
Dividends must always be approved by the shareholders’ meeting and we must take into account that they follow a protocol and a schedule:
Date of announcement of the dividend. At that time, the Board of Directors announces the amount of the dividend to be paid.
Date of registration. The date on which the company officially determines its shareholders.
Listing date ex-dividend. On this date, although the company has not yet paid out the dividend, it will be noted without the dividend.
Let’s say, for example, that the Renault shares are quoted at 20.30 euro per share and that you pay 30 eurocent dividend.
The ex-dividend listing date is March 30, on which day he is quoted at €20 and “loses” his listing the part corresponding to the dividends, the 30 cents.
Payment date. It is the date on which the shareholders receive the money on their Broker accounts.
All these dates are not the same for all shares. Some companies require a shareholder to be a shareholder three months earlier in order to be entitled to his dividend, others even more so.
In some countries, such as Spain, it is only necessary to have the shares three or four days before the ex-dividend date.

Where can I buy shares that pay dividends?

The shares that pay dividends can be found in all the exchanges of the world: United States, Spain, the United Kingdom, Germany, Italy, France, Spain, France….
To find out whether or not a company pays dividends, you can use several tools, although the most common thing is to go to the section that companies usually have on their website, to inform their shareholders.
If you don’t find the information you need, all listed companies have an obligation to report relevant facts that may affect their price and their financial statements.
In Spain, this information can be found in the CNMV as “relevant facts”.
From the CNMV itself you have access to the economic data of companies: results, balance sheets, cash balances, in addition to all this information also the amount that they allocate to dividends is included.
How to buy shares that pay dividends
If you want to buy shares that pay dividends, you have to buy shares of that company.
To buy shares, you must open a Broker Account, which is the financial intermediary between the market where the shares are listed and the buyers.
In order to buy shares, you must open a brokerage account.

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