Glossary
Ex-Dividend Date: The date you must hold the stock to be entitled to its cash dividend. You can sell the stock during that day, but you must own it at market opening to be elligeable to receive its dividend. In smartdividend.com, the Ex-Dividend date is always in the blue title of each entry, and in the black text is referred to as: "to holders as of date." Example.
Record Date: For accounting pruposes, this is the date where the company record stockholders who are elligeable to receive a dividend. This date is usually 2 business days after the Ex-Dividend date. It has no practical purposes for Dividend Strategy investors, but this the date often referred to on Press Releases announcing dividends. The record date is never mentioned on smartdividend.com.
Payable Date: The date where you will actually receive the cash dividend. It can be a few days or a few weeks after the Ex-Dividend date. Example.
Earning Dividends: The kind of dividends paid by companies out of their earnings. Most regular dividends by non-REIT corporations fall in this category. They are taxed as regular income, and qualify for the lower tax rate if you keep the shares long enough.
Return of capital dividends: The kind of dividends paid by corporations out of their capital gains. Many "special" dividends and most dividends paid by REIT fall in this category. Special dividens can also include both an "earning" part and a "return of capital" part. Return of capital dividends are taxed as a capital gain at the time you sell. More about dividend taxation.
Pregant stock: A stock that's about to pay dividend. In other words, the few days before the ex-dividend date. Also referred to as "Cum-dividend stock".
Dividend yield: The value of the current dividend divided by the latest share price. Usually represented as a % on the SmartDividend board or ex-dividend calendar.
Annual dividend yield: The sum of all the dividends paid in the last year divided by the latest share price. In some cases, the annual dividend yield is computed by using the company's fiscal year instead or the current calendar year, or by using the company's estimate for dividend payment during the current fiscal year.
Annualized dividend yield: calculated by multiplying the latest dividend by the number of dividends usually paid during a year, divided by the latest share price. Example.
Example
On the smartdividend.com web site, you read the following entry:
DSX ex-dividend on 8/16 (2.7%)
Diana Shipping, a dry bulk transporter, will pay a regular quarterly dividend of $0.35 on August 31 to holders as of Wednesday, August 16 (taxed as earning dividend). That’s 2.7% of the share price of $13.05, or a 11% annualized yield.
This means that 8/16 is the Ex-Dividend date: you must hold shares of Diana Shipping Inc. (symbol: DSX) at stock market opening on August 16 to receive the dividend.
August 31 is the Payable Date: If you did own Diana Shipping at market opening on 8/16, you will receive $0.35 cash per share, and that amount will be paid to you on August 31st.
This dividend will be taxed as Earning Dividend, if you capture it. More about Taxation.
The yield is 2.7%. It equals $0.35 (the dividend) divided by $13.05 (the latest share price). Since this is a quarterly dividend, the annualized yield is about 11% (four time $0.35 divided by $13.05)
