Important Dates that Dividend Investors Should Take Note

In our quest to be a successful dividend investor, there are 4 important dates that we should be familiar with in order to build our streams of dividend income.

1) Declaration date:

This is the date on which the company or board of directors declares that a certain amount of dividend would be paid to the shareholders.

2) Ex-date

This is the date or first day the stock trades without the right to receive dividend. If you buy on the ex-date itself, you will not be entitled to receive the recently declared dividend. To qualify for the recently announced dividend, you need to buy before the ex- date. 

Some investors buy into the shares one day before the ex-date in order to 'capture' the recently declared dividends. However, the share price on the ex-date will be adjusted lower by the amount of dividend declared, making the total value of your investment to be the same theoretically. That said, the actual quantum of adjustment might differ from the amount of dividend declared due to market forces.  

If you want to sell your shares and still entitle for the recently declared dividend, you have to sell your shares on or after the ex-date of recently announced dividend.

3) Entitlement date

This is the date on which the company will refer to its records of shareholders to determine who the shareholders are.  Entitlement date is 2 business days after ex-date.

4) Payment date

The date on which the dividend is paid out, dividend is now credited into your bank account electronically or what we call E-dividend. This is the date where dividend investors feel happy and delighted!

Let's look at an example of the latest dividend declared by Heineken Malaysia (formerly known as Guiness Anchor Berhad).

On 18 July 2016, Heineken Malaysia declared dividend of RM0.35 per share, The ex-date is on 7 September 2016 and entitlement date is on 9 September 2016 with payment date on 7 October 2016.

Hence, investors whose name appear in the records of shareholders on 9 Sept 2016, will therefore be entitled to the dividend payout on 7 Oct 2016.

Do remember these 4 dates in your dividend investing journey!