Many companies that issue shares on the stock markets regularly distribute dividends to their shareholders. The payment of these dividends takes place regularly on dates set by the General Committee of each company.
These payment dates can be consulted on an official document called the ‘Dividend Distribution Calendar’ that you can learn more about here.
The distribution dates of these dividends are highly important as they can influence the price of stock market shares.
Dividends correspond to payments made to the shareholders of a company in response to their participation in the company’s capital. They represent distributable profits that the General Committee decides to pay to each shareholder according to the shares they hold.
The dividend distribution can be completed through a direct cash payment to the shareholders or ‘in kind’ meaning in the form of subsidiary shares or other company assets, for example newly issued company shares.
It can be very useful to know when a company decides to distribute dividends as such a distribution can have a major effect on the share prices themselves. In fact, when the shareholders are paid their dividends this generally results in a brief drop in the share price.
Therefore, if you know the dividend distribution dates of a company it is easy to make profits by trading these shares at a fall just after the payments within a short timeframe.
The payment of dividends is undertaken regularly on the dates decided by the general committee of each company. Until fairly recently these payments were made annually but in recent years these distributions have started to be paid biannually mainly in order to attract new investors. Many European companies however still pay on a yearly basis, a few days after the dividend amounts have been agreed at the AGM.
It is therefore by using a dividend distribution calendar that you will learn the dividend distribution dates. These calendars are accessible on the websites of the relevant companies and on websites dedicated to the stock markets.
To profit from price movements generated by the distribution of a company’s dividends you can use a Forex trading platform to access CFDs and take a selling position.