Our Goods & Services Tax course includes tutorial videos, guides and expert assistance to help you in mastering Goods and Services Tax. Clear can also help you in getting your business registered for Goods & Services Tax Law. They’ll announce the amount of the dividend and the dates for everything else that follows. Helpful articles on different dividend investing options and how to best save, invest, and spend your hard-earned money. The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. ITC reported a standalone net profit of Rs 19,561.57 crore for the fourth quarter ended March 2025.

This information is educational, and is not an offer to sell or a solicitation of an offer to buy any security. This information is not a recommendation to buy, hold, or sell an investment or financial product, or take any action. This information is neither individualized nor a research report, and must not serve as the basis for any investment decision.

While a stock is ex-dividend, it is traded knowing that a pending dividend payment is not included in the sale. The owner of the stock on the day before the ex-dividend date will receive the distribution regardless of whether or not they still own the stock when it is paid. You can leverage ex-dividend opportunities by understanding the key dates involved, such as the announcement, record, ex-dividend, and payment dates.

If Bob didn’t value having the dividend payment, he could have bought HYPER shares on the first ex-dividend day and paid the lower price. The right decision will always depend on the investor’s own situation and personal preferences. When announcing an upcoming dividend payout, a company typically states that it will make a payment to shareholders of record as of a certain date. But buying a stock on its ex-dividend date will not make you a shareholder of record in time to qualify for the upcoming payout.

What is Ex-Dividend Date: Meaning, Types, Example, How to Check It

Let’s say that Bob is excited about HYPER’s earnings and buys 100 shares on Monday June 10, for settlement Das trader on Tuesday, June 11, at a price of $10 per share. The stock will go ex-dividend (trade without entitlement to the dividend payment) on Tuesday, June 11, 2024. Bob already owns the stock on Tuesday, June 11, because he purchased the stock with entitlement to the dividend on the previous day. A dividend is typically a cash payment that a company pays to its shareholders as a reward for investing in its stock or equity shares. As companies generate a profit, they usually accumulate or save those profits in an account called retained earnings.

How to Identify Undervalued Stocks: A Beginner’s Guide

An investor must buy a stock (if it offers dividends) before the ex-dividend date so that the trade will settle in time for the investor to be listed as an owner, as of the record date. The record date is when the company references its list of shareholders to see who’s considered an official investor. It typically takes either two days (T+2) – the trade date plus two days – or (T+1), trade plus one day, for a trade to settle. An investor can only appear as an official shareholder once their trade has settled.

• Similarly, pace of recovery in FMCG needs to be watched due to heightened competitive scenario in Foods.
• Shorting a stock is the act of selling it and then repurchasing it at a hopefully lower future price.
• The stock will go ex-dividend (trade without entitlement to the dividend payment) on Tuesday, June 11, 2024.
• This includes a one-time exceptional item of Rs 15,179 crore from discontinued operations.
• You must own a stock before the ex-dividend date to qualify for a dividend, meaning that you must buy it the day before or earlier.

Mutual Funds

Ex-dividend dates are extremely important in dividend investing, because you must own a stock before its ex-dividend date in order to be eligible to receive its next dividend. Check out the below screenshot of the results for stocks going Ex-Dividend on October 30, 2018. A stock trades ex-dividend on and after the ex-dividend questrade fx date or ex-date. Investors who buy a stock on the ex-dividend date or after will not receive the next dividend payment. Since buyers aren’t entitled to the next dividend payment on the ex-date, the stock will be priced lower by the amount of the dividend by the exchange. Ex-date is the cut off day on and after which the shareholders aren’t eligible for the said dividend if their names aren’t in the company’s record as on the record date.

• Keep in mind, other fees such as trading (regulatory/exchange) fees, wire transfer fees, and paper statement fees may apply to your brokerage account.
• Save taxes with Clear by investing in tax saving mutual funds (ELSS) online.
• Ex-date is the cut off day on and after which the shareholders aren’t eligible for the said dividend if their names aren’t in the company’s record as on the record date.
• To get the dividend, you need to hold the stock at least until the ex-dividend date.
• On May 28, 2024, the ex-dividend date and record date became the same day, due to the move to t+1 settlement.
• Theoretically, the share price should drop by the full dividend amount at the beginning of trading on the ex-dividend date.

This system assumes that two full business days are necessary to fully process a transaction. For example, if a security is purchased before closing on a Monday, that day is considered the trading day. Therefore, the transaction must be fully processed by the end of the day on Wednesday, which is the second full day after the trading day. Similarly, Tuesday’s and Wednesday’s transactions must be processed by Thursday and Friday, respectively. Investors who purchase on or after this date will miss out on the upcoming payout, even if they hold the stock long enough to receive the dividend in their account. In the world of Markets, one of the most important and yet often misunderstood dates for stockholders is nothing but the Ex-Dividend Date.

How do ex-dividend dates work?

In stock market terminology, the ex-dividend date meaning refers to the specific trading session after which new buyers of a stock will not qualify for the next declared dividend. Put differently, if you purchase shares on or after the ex-dividend date, you’re ineligible for the forthcoming dividend payout; the seller retains the right to it. Pay Date or Date of Payment is when the company mails the dividend checks or initiates a direct transfer of funds to the shareholders’ brokerage account. However, most pay dates are usually about two to four weeks after the record date. This time delay allows the company to process and prepare the checks for mailing and set up the electronic funds transfers. The Ex-dividend Date is the date on which a stock begins trading without the value of its next dividend payment.

What Does the Dividend Payout Process Look Like?

This document should not be construed as a research report or a recommendation to buy or sell any security. This document is for information purpose only and should not be construed as a promise on minimum returns or safeguard of capital. This document alone is not sufficient and should not be used for the development or implementation of an investment strategy.

That is, the purchaser of stock shares on or after that date will not be paid a pending dividend payment. The ex-dividend date is typically set one business day before the record date. This timing is based on the stock market’s settlement process, known as “T+1” (trade date plus one day). When you buy a stock, it takes one business day for the transaction to be settled and for you to become the official owner of the shares. The term “ex-dividend” comes from the Latin “ex” meaning “without.” On the ex-dividend date, the stock is trading without the upcoming dividend attached to it. Investors who buy shares on or after this date are purchasing the stock without the right to receive the next dividend payment.

Investors buying the stock to qualify for the dividend can have the effect of pushing the company’s share price up. For example, if a company announces it will pay a dividend on Sept. 1 to shareholders of record as of Aug. 25, the ex-dividend date for the stock would take place on Aug. 24. To receive the dividend payment, it would be necessary to own shares when the stock market closed on August one trading day before the ex-dividend date.

The declaration date is the day the company announces a dividend distribution via a press release. The company’s board of directors will have decided to pay a dividend days or weeks earlier. But the declaration date is the first day the public is made aware of the upcoming distribution. Since it takes a couple of days for stock purchases to officially go through, you have to buy the stock before the ex-dividend date to be on the company’s books by the record date.

Investors who owned Coca-Cola stock immediately preceding the ex-dividend date received a payment of $0.46 for each share they held, and the payout was distributed on April 3. On the other hand, an investor who purchased stock in the company on or after March 16 would not have been considered a shareholder of record in time to receive the dividend for the quarter. Alternatively, it’s not unusual for a stock to fall after its ex-dividend date. Once the ex-dividend date has been reached, an investor holding a stock will be considered a shareholder of record and be locked in to receive the upcoming dividend payment even if they sell the stock. With the dividend already secured, investors may have less reason to hold on to the stock — and an uptick in selling can push its share price lower. As a stock approaches its ex-dividend date, investors may be incentivized to purchase the stock so that they will be shareholders of record and eligible to receive the upcoming payout.

If you want to receive the $0.50 dividend, you need to purchase the stock on or before July 13 (the day before the ex-dividend date). If you buy the stock on or after July 14 (the ex-dividend date), you won’t receive the dividend. The ex-dividend date is a crucial concept for anyone double top neckline investing in dividend-paying stocks. Understanding how this date works, how it affects stock prices, and how it influences dividend eligibility can help you make smarter investment decisions. This ex-dividend date is a very critical milestone for dividend-paying stocks, as it determines which investors or traders are eligible for the dividend payment. Many high growth companies will choose not to distribute dividends but rather reinvest the retained earnings back into the company to foster growth.