Dividends - is the amount of profit, which is obtained by shareholders of the company on the results of his work (usually a year). As a rule, buying share, its holder does not think about the level of dividends.
A much greater profit can bring the growth of the market rate of the securities. Dividend yield is not high, and often is the order of 5-10%.
Payment of dividends is usually carried out onend of the year. On the board of directors discussed the direction of the distribution of profits, which are then submitted to the general meeting of shareholders. Its members may vote both positively and make a negative decision. Sometimes companies pay dividends during the year, for example, at the end of the quarter. This happens when it receives a high profit associated typically with cyclical pricing.
In order to receive dividends on shares, notIt has to be their own for a year. It is enough that at the close of the shareholders' register you on the list. The register of shareholders containing information on all holders of shares enterprise. Date of formation of the registry established by the Board of Directors. Persons who are entitled to receive annual dividends, are entitled to attend the general meeting of shareholders. The Board of Directors shall appoint the date of the convening of all shareholders and announces them on the registry is closed. After that, the market shares of the course is usually reduced to the size of dividends paid.
In addition to ordinary of shares Many companies issue preferred. They tend to have a higher yield than the standard, but do not give the right to vote at shareholder meetings. Recommended value of the dividend on such shares owners set simple of shares at the general meeting of shareholders. If the results of the meeting the decision to abolish the payment of dividends on preferred shares, they acquire the status of ordinary shares and participate in the next vote on an equal basis with everyone else. As soon as the dividends on preferred shares will be paid, they again lose the right to vote.
The level of dividends received is dependent onthe company's dividend policy. Some of them give shareholders much of the generated profits, other years do not pay dividends. It all depends on the level of profitability of the company, the industry in which it operates, and the duration of activity. Enterprises, recently created, all the profits directed to the expansion and development of business. High dividends can be expected from a stable operating companies not planning to expand in the near future activities.