What Are the Important Dividend Dates?
When it comes to investing in dividend-paying stocks, it’s important to understand a stock’s key dividend dates because these dates determine your eligibility for receiving dividends on the dividend stocks you buy. The four most important dividend dates are the ex-dividend date, the declaration date, the record date, and the payment date.
Example: You can see Coca-Cola’s (KO) dividend history and past dividend dates below:
Ex-Dividend Date
The ex-dividend date is the most important dividend date for investors because shareholders must own the stock before the ex-dividend date to be eligible to receive the next dividend on their shares. You will not receive a stock’s upcoming dividend if you buy the stock on or after the ex-dividend date.
TIKR does not currently report a stock’s dividend dates (we might in the future!), but a great way to find a company’s next ex-dividend date is by looking at dividend.com or nasdaq.com.
Example:
- You can see that Coca-Cola had a dividend payment date of October 1st, 2024, while it had an ex-dividend date of September 13th, 2024. This means that investors who bought Coca-Cola before September 13th were eligible to receive Coca-Cola’s third-quarter dividend on October 1st:
The ex-dividend date is the most important dividend date, but dividend investors should still understand the other dates.
Declaration Date
The declaration date is the day a company’s board of directors announces that a dividend will be paid. On this date, the company discloses the dividend amount, the ex-dividend date, the record date, and the payment date.
Example: Coca-Cola declared its upcoming dividend, ex-dividend date, and dividend payment date on its declaration date of July 29th:
Record Date
The record date is the date when a company records all the shareholders eligible to receive the upcoming dividend. This date is usually the same as the ex-dividend date, or it’s 1-2 business days after. The record date is important because it is the official cut-off for determining which shareholders are entitled to receive the dividend.
Example: Coca-Cola had a record date of September 13, 2024, the same date as its ex-dividend date. This means that only shareholders who owned the stock before this date received the stock’s upcoming dividend.
Payment Date
The payment date is the day when the dividend is actually paid to shareholders and when the cash from dividends arrives in an investor’s brokerage account. This date is generally a few weeks after the ex-dividend date.
Example:
- Coca-Cola had a dividend payment date of October 1st, 2024. All shareholders who owned Coca-Cola stock before the stock’s ex-dividend date of September 13th received dividends on October 1st:
How Can Investors Find a Stock’s Dividend Dates?
It can sometimes be difficult to find accurate and up-to-date information on when a company’s dividend dates are. We recommend checking out Nasdaq’s dividend calendar, but several other resources can help you track important dividend dates for stocks as well as dividend history:
- Company Announcements: Many companies announce dividend dates on their investor relations websites.
- Brokerage Accounts: Most brokerage platforms provide detailed information about upcoming dividends for stocks you own or are watching.
- Dividend Calendars: Websites like dividend.com or nasdaq.com offer calendars that list upcoming dividend dates for various stocks.
Example: On nasdaq.com, here are some of Home Depot’s (HD) past dividend history and key dividend dates:
Ex-Dividend Date and the Stock Price
There’s a special phenomenon where, on the ex-dividend date, the stock price drops by approximately the amount of the dividend.
This drop occurs because the company just paid out its dividend, and technically, the business fell by the value of this expense. Additionally, new buyers are not entitled to the upcoming dividend after the ex-dividend date, which makes the stock slightly less valuable.
Example:
- If Home Depot’s stock closed at $375 per share the day before its ex-dividend date, and the quarterly dividend is $2.25 per share, the stock might open at around $372.75 per share on the ex-dividend date. This is because shareholders are no longer eligible to receive dividends on these shares, so the stock would fall by approximately the value of the quarterly dividend.
Is It Better to Buy Before or After the Ex-Dividend Date?
While it might make sense to rush to buy shares before the ex-dividend date, it could counter-intuitively make sense to wait to buy shares until after the ex-dividend date to take advantage of the small drop in the stock’s share price.
- Buying Before: If you buy before the ex-dividend date, you qualify for the dividend, but the stock’s price will likely drop by the dividend amount on the ex-dividend date. For long-term investors focused on income, buying before the ex-dividend date can be beneficial if you value the regular cash flow from dividends.
- Buying After: If you buy after the ex-dividend date, you won’t receive the upcoming dividend, but you might purchase the stock at a lower price due to the ex-dividend drop. This strategy could be advantageous if you focus more on capital appreciation than immediate income.
This decision probably won’t have much on a long-term investor’s total returns, so it isn’t worth agonizing over. It’s more important to focus on buying the right stocks and purchasing shares at prices that make sense to you.
Will I Get a Dividend If I Sell Before the Ex-Dividend Date?
If you sell your shares before the ex-dividend date, you will not receive the upcoming dividend. To be eligible for the dividend, you must hold the stock through the market close the day before the ex-dividend date. If you sell on or after the ex-dividend date, you will still receive the dividend, even though you no longer own the stock.
Example:
- Coca-Cola had a past ex-dividend date of September 13th. If shareholders sold their $KO shares on September 12th or earlier, they would not have received a dividend on their shares. However, they would have received the dividend if they sold on September 13, 2024.
Investor FAQs:
What is the ex-dividend date?
The ex-dividend date is the cutoff date when an investor must own a stock to receive the upcoming dividend payment. If you purchase a stock on or after this date, you will not be eligible to receive the declared dividend.
What does ex-dividend mean?
Ex-dividend means that a stock trades without the value of its next dividend payment. After the ex-dividend date, new stock buyers are not entitled to receive the declared dividend.
What happens to the stock price on the ex-dividend date?
On the ex-dividend date, a stock’s price typically drops by approximately the dividend amount. This drop reflects the fact that new buyers are not entitled to the upcoming dividend, and the dividend payout reduces the company’s value.
Where can you find a stock’s ex-dividend date?
A stock’s ex-dividend date can be found on financial news websites, stock market data platforms, the company’s investor relations page, or financial research tools like dividend.com or nasdaq.com.
What’s the best ex-dividend date calendar?
The best ex-dividend date calendar depends on user preferences, but Nasdaq’s Dividend Calendar is one of the best options.
TIKR Takeaway
By knowing a stock’s ex-dividend date, investors can make more informed decisions about when to buy or sell stocks to optimize their dividend income and enhance their dividend investing strategy.
The TIKR Terminal offers industry-leading financial data on over 100,000 stocks, so if you’re looking to analyze stocks for your portfolio, you’ll want to use TIKR!
TIKR offers institutional-quality research for investors who think of buying stocks as buying a piece of a business.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. We aim to provide informative and engaging analysis to help empower individuals to make their own investment decisions. Neither TIKR nor our authors hold positions in any of the stocks mentioned in this article. Thank you for reading, and happy investing!
