Dividend Calculator
Understanding Dividends
Dividends are a portion of a company's profits that are distributed to its shareholders. When a company is profitable, it has a few options for what to do with those earnings: reinvest them back into the business for growth, pay down debt, or distribute some of the profits to its shareholders in the form of dividends.
Companies that pay dividends are often mature, stable businesses with consistent cash flow. While not all companies pay dividends (many growth-oriented companies reinvest all their profits), they can be an attractive component of an investment portfolio, providing a regular income stream in addition to potential capital appreciation.
Types of Dividends:
- Cash Dividends: The most common type, paid directly to shareholders in cash.
- Stock Dividends: Paid in the form of additional shares of the company's stock.
- Property Dividends: Less common, paid in the form of other assets.
Key Terms:
- Ex-Dividend Date: The cutoff date to be eligible to receive the dividend. If you buy a stock on or after the ex-dividend date, you will not receive the upcoming dividend payment.
- Record Date: The date on which a shareholder must be registered with the company to receive the dividend.
- Payment Date: The date on which the dividend is actually paid to eligible shareholders.
The dividend payout per share, combined with the number of shares you own, determines the total dividend income you can expect to receive. This calculator helps you quickly estimate that income.