Dividends are the amount of profit that shareholders of a company receive on the basis of the results of their work (usually a year). As a rule, acquiring a share, its holder does not think about the level of dividends.
A much greater profit can be brought by the growth of the market rate of the security. Dividend yield is often not high and is about 5-10%.
Dividends are usually paid onResults of the year. The board of directors discusses the directions of profit distribution, which are then submitted for consideration to the general meeting of shareholders. Its participants can vote both positively and make a negative decision. Sometimes enterprises pay dividends during the year, for example, at the end of the quarter. This happens in those cases when it receives a high profit, associated, as a rule, with the cyclical pricing.
In order to receive dividends on shares,Be sure to be their owner for a year. It is enough that on the day of closing the register of shareholders you will be on this list. The shareholders register contains information about all holders Of shares Enterprise. The date of formation of the register is established by the Board of Directors. Persons who are entitled to receive annual dividends are entitled to participate in the general meeting of shareholders. The Board of Directors appoints the date for the convocation of all shareholders of the company and announces to them that the register is closed. After that, the market rate of the stock, as a rule, is reduced by the amount of dividends paid.
In addition to ordinary Of shares Many enterprises issue preferred shares. They tend to have higher returns than ordinary ones, but do not give voting rights at shareholders' meetings. The recommended amount of dividends for such shares is established by the owners of simple Of shares At the general meeting of shareholders. If, following the meeting results, a decision is made to cancel payment of dividends on preferred shares, then they acquire the status of ordinary shares and participate in the next voting on an equal basis with all. Once dividends on preferred shares are paid, they again lose their voting rights.
The level of dividends received depends onDividend policy of the company. Some of them give the shareholders a large part of the generated profits, others do not pay dividends for years. Everything depends on the level of profitability of the firm, the industry where it operates, and the duration of the activity. Enterprises, newly created, direct all profits to the expansion and development of business. High dividends can be expected from the stable operating companies that do not plan to expand their activities in the near future.