What is an ex-dividend date & why is it important?

The ex-dividend date is the most important date in dividend investing, since it determines who and who isn’t eligible to receive the dividend. You must own a stock before the ex-dividend date to receive the next scheduled dividend.

When should a dividend be declared?

By regulation, the declaration date must be at least 10 business days before the record date. Ex-dividend date: This is the cutoff date to decide who gets the next dividend payment. If you own the stock one business day before the ex-dividend date, you get the payment. If somebody else owns the stock on that date, they get the payment.

What are the four major dates in a dividend distribution?

To summarize the four major dates in the process of a dividend distribution: The declaration date is the day on which the board of directors announces the dividend. The ex-date or ex-dividend date is the trading date on (and after) which the dividend is not owed to a new buyer of the stock. The ex-date is one business day before the date of record.

What is the payment date for a stock's dividend?

The payment date for a stock's dividend is the day on which the actual checks go out—or electronic payments are made—to eligible shareholders. Shareholders owning the stock on the record date will receive the dividend on the payment date.