This sweet word is a dividend.
However, on the other hand, no one took off the agenda the question “Where to put the“ extra ”money? Take to the bank? “. But after the mass revocation of licenses and publicly-demonstrative bankruptcies of such major players of the banking market as Masterbank and Trust, many are already afraid to contact Russian banks. Then what else? Currency? But we see how, over the past 3 months, the euro has rapidly depreciated against the dollar. Then maybe dollars?
But who will give you a guarantee that the same will not happen to the dollar in the near future as to the euro? And just to keep the currency at home is no reason – after all, everyone knows that money should work and generate income. In short, questions, questions, questions … And money continues to be a dead weight and depreciate from rapidly accelerating inflation. Developing the topic of saving money, I would like to consider alternative investment opportunities. Investing in stocks to get dividends is the most reliable way.
According to the Tax Code of the Russian Federation, any income received by a shareholder (participant) from an organization when distributing profit remaining after taxation (including interest on preferred shares), on shares (shares) owned by the shareholder (participant) in proportion to the shares of shareholders (participants ) in the authorized (share) capital of this organization.
Dividends also include any income received from sources outside the Russian Federation relating to dividends in accordance with the laws of foreign countries. In other words, a dividend is a part of the profit that is distributed among the shareholders in accordance with the number and type of shares in their possession. Russian companies usually pay dividends only once a year. And just the end of spring-the beginning of summer – this is the dividend time. As popular wisdom says, the grass turns green, the sun shines, the dividend with spring flies to your account.
Cut-off – closing the register of shareholders with fixing the number of votes.
Gap – the gap in price.
Many private investors still do not know that, in accordance with the changes in the laws “On Joint Stock Companies” and “On the Securities Market”, the procedure for approving the amount of dividends and their payments were changed last year. According to these changes, the dividend rally – the period when investors begin to actively buy shares in order to receive dividends – does not begin in February-March, as it was several years ago, but in fact at the beginning of summer. Under the new rules, the cut-offs for the annual meeting of shareholders and for the payment of dividends are divided. Previously, the cutoff mainly occurred in April and the first half of May, after which the shares fell with huge gaps, taking into account the estimated amount of dividends.
At the same time, shareholders, buying shares under the May dividends, did not know whether these dividends would be paid and what their size would be. Now this process will take place somewhat differently. At about the same time as in previous years (end of April and beginning of May), joint-stock companies will close their registers to attend the annual meeting of shareholders.
And then there can be trouble. Those shareholders who bought shares under dividends and who are not aware of the new rules may start selling their shares immediately after the shareholders meeting and … will be left without dividends. They will not receive their dividends, which they so expected, since at the meeting of shareholders only the size of dividends is now approved and a new closing date of the registry is set for their payment. By law, this should be no later than 20 days after the meeting of shareholders, but not earlier than the date of the meeting.
Thus, the closing of the registry under dividends can not be executed retroactively. Another innovation related to changes in the law: dividends must be paid to shareholders within 10 business days after the register is closed. Previously, it was given 60 days after the meeting of shareholders.
So, despite the fact that dividend cutoffs will not be in April-May, as before, but in June-July, the dividends themselves will come a month earlier. These are all technical details, but knowing them is important. For all matters related to dividends, you can always consult with your broker – the exchange intermediary, from whom you open an account and will buy shares on the exchange. It is much more relevant to look, and what can we expect when buying shares under dividends. Table 1 shows the expected dates of closure of registers and the expected amount of dividends on the largest Russian companies.
As you can see, there is plenty to choose from. However, in any case, we must understand that buying a stock under the receipt of dividends means investing your money for 3-4 months. During this period, anything can happen, and the market value of the shares purchased for dividends can either rise or fall. Moreover, it is also necessary to know that usually after the announcement of the size of dividends and immediately after the closure of the shareholder register, stock prices fall.