What are dividends?

What are dividends? Dividend

Dividend, also known as Dividend in English, is a unique method of asset return for stocks or stock-related financial investments. When a public company provides stable and long-lasting dividends, shareholders will receive a substantial return on their investment, which may even exceed the capital gains on the stock itself.

There are also listed companies that provide dividend stocks to benefit shareholders and thereby obtain more investment funds. Mutual funds (Mutual Funds), or ETFs, composed of stocks that provide dividends, have also become the first choice for many investors looking for stable returns. But it also has its own risks, such as the instability of dividends.

After we understand dividends and dividend stocks, we can better optimize our financial investment portfolios. If you are using Futu moomoo, you can easily find the dividend information of each stock in the online trading software or APP. If you open a stock account on Futu moomoo and make a deposit, you can get multiple free US stocks.

For specific account opening benefits, please check Futu moomoo benefits.

The following is Apple’s dividend payment information obtained from Futu moomoo: For example, when Company A announces that it will distribute a dividend of $0.3 per share to shareholders, if an investor holds 100 shares of the company, he or she will receive a dividend of $0.3 Dividends can be an excellent way to attract investors.

When a company issues a dividend for the quarter or year, shareholders can receive regular income from the stock regardless of how the stock price moves. Especially when stock prices stagnate or fall, dividends have become the main way for shareholders to benefit from adversity.

At the same time, another beneficial situation will also occur, that is, when the stock falls, the dividend yield will increase, thereby attracting more investors, which will push the stock price up.

Regarding dividend investing, investors need to understand four key dates: the dividend announcement date, the ex-dividend date, the equity registration date, and the dividend payment date: Dividend declaration date Dividend announcement date, also known as Declaration Date or Announcement Date in English, is the date on which the board of directors of a listed company announces its plan to pay dividends, as well as related information.

ex-dividend date The ex-dividend date, also known as Ex-Dividend Date in English, is the date that determines whether investors are eligible to receive current stock dividends. Ex-dividend means that after investors purchase the stock, they cannot receive the current dividend of the stock.

Shareholders who purchase a company's shares before the ex-dividend date will receive dividends that have been declared. Shareholders who purchase the company's shares on or after the ex-dividend date will not receive dividends that have been declared, but they can receive dividends starting from the next round.

Typically, a stock's ex-dividend date is a few business days before the record date. Equity registration date The equity registration date is Record Date in English.

As of the equity registration date, shareholders need to record their equity information in the company's shareholder register to be eligible for dividends declared by the company during this period.

In other words, only shareholders who are recorded on the company's shareholder list before the equity registration date can receive dividends during this period. Dividend payment date Dividend payment date, also known as Payment Date in English, is the date when the company actually pays dividends to shareholders.

Most companies pay dividends every quarter, and some companies choose to pay dividends once a year. How to find the dividend yield and distribution time of a stock?

Step 1: Open the Futu moomoo APP and find the stocks you want to view from the Watchlist: Part 2: On the individual stock information page, find the [Summary] option On the Summary page of individual stocks, find the [Shareholders] option In the Shareholders section, you'll find brief information about the stock's dividends.

Click [Details] on the right to view detailed information on dividends View detailed information on dividend payments, including ex-dividend date, record date, and payment date. Click the [Trade] option at the bottom of the Futu moomoo APP Click on your [Brokerage] account

Click [Funds Details] to view account information Click【All Types】 Select [Coporate Actions] in the drop-down menu of [All Types] Check the dividend history of the stocks you purchased What types of dividends are there? 1. Cash dividends Regular cash dividends are dividends paid in cash to shareholders from the company's profits.

A company that issues preferred shares* must first distribute profits to preferred stockholders in proportion, and then to common stockholders. *Preferred shares: refers to the right to distribute the company's profits and residual property, which has priority over ordinary shares.

The dividend rate of preferred shares is fixed, and a fixed dividend rate is agreed upon when the preferred shares are issued. This dividend rate remains unchanged no matter how the company's profitability changes. However, preferred shareholders have no voting rights and cannot withdraw their shares.

Common shares: They are stocks usually issued by a company without special rights and are the most important equity securities. Ordinary shareholders enjoy the basic rights of shareholders, namely income rights and voting rights. 2.

Dividends in kind On the dividend payment date, the company records the dividend amount into the company's accounts, and then distributes it to shareholders in various physical objects equivalent to the dividend, such as gold, silver and other tangible value objects, instead of cash or stocks. 3.

Special one-time dividend In addition to regular dividends, sometimes a company may pay a one-time special dividend. This situation is rare and can occur for a variety of reasons, such as winning a major lawsuit, selling a business, or liquidating an investment. This can be in the form of cash, stocks or real assets. 4.

Stock Dividends Dividends paid in the form of company stock rather than cash. Usually a pro-rata distribution of additional shares of company stock to shareholders.

A company paying stock dividends may be due to insufficient cash holdings or a desire to lower the overall stock price by lowering the unit price per share to facilitate more transactions and increase liquidity.

The Dividend Re-Investment Plan (abbreviated as DRIP) is a plan in which the company distributes dividends to shareholders in the form of stocks to implement a dividend reinvestment plan. Stock share purchases through a dividend reinvestment plan typically pay little or no commissions and enable the purchase of fractional shares.

Holding shares in a company with a strong record of paying dividends often snowballs investors' returns over time. What is dividend yield? Dividend yield, sometimes called "dividend yield", refers to the ratio of dividends received by shareholders (one year) to the share price per share when the stock was purchased.

The calculation formula is as follows: Dividend rate = dividends paid in one year ➗ Stock price The usual value is the dividend yield calculated on an annual basis.

Since dividend payments are usually four times per year, this means that when a company proposes a dividend of $0.22 per share every quarter, shareholders are actually receiving a dividend of $0.88 per share annually. Of course, some companies will pay dividends once a year.

In this case, the dividend yield is the rate of return when shareholders receive dividends. Example: You purchase stock at $10/share. The company pays a quarterly dividend of $0.1/share and earns $0.4/share in dividends a year. Then the dividend yield is $0.4/$10 = 4%, that is, the company’s dividend yield (Dividend Yield) for the year is 4%.

An individual's dividend yield is recognized when the stock is purchased. However, the dividend yield declared by the company will change based on the fluctuation of the company's stock price.

For example, if the dividend is determined, when the company's stock price falls, the dividend yield will rise; conversely, when the stock price rises, the yield will fall. Because dividend yields change relative to the stock price, dividend yields often appear to be unusually high for stocks that are rapidly declining in value.

For the company, this will play a role in attracting investors to a certain extent, but as an investor, you need to compare the changes in yields over a longer period of time to determine whether the high yield is worth investing. Are dividends subject to tax?

Dividends, as a form of personal income, also have tax requirements, but the taxes will be different for different types of dividends. Generally, there are two categories of dividends: qualified dividends and non-conforming dividends. For qualified dividends

The English name for qualified dividend is Qualified Dividend. The following requirements need to be met: The company distributing the dividend is a U.S. company, or a foreign company registered in a country that enjoys tax benefits under a U.S. tax treaty (such as Inditex), or the shares of a foreign company are traded on a major U.S.

stock market; The investor has held the stock for more than 60 days before the ex-dividend date; Dividend income that meets these conditions is taxed at the lower long-term capital gains tax rate: Qualified dividends are exempt from tax for individuals earning less than $39,375 per year; For individuals with annual income between $39,375 and $434,500, the

tax rate on dividends is 15%; For individuals earning more than $434,500 per year, dividends are taxed at 20%; For non-compliant dividends The English name for unqualified dividend is Unqualified dividend Dividends that do not meet the conditions for qualified dividends are called non-conforming dividends, and the income is taxed at normal personal income tax rates.

What investment products can earn dividends? Dividend Stocks Dividends are paid to investors by listed companies, and generally speaking, blue chip stocks* and companies with stable profit growth are more likely to pay dividends that last for a longer period of time and have a stable yield.

*Blue chip stocks: refers to the stocks of large companies that occupy an important dominant position in the industry, have excellent performance, active daily transactions, high company visibility, large stock market value, high credibility of company operators, stable company operating profits, fixed annual distribution of dividends, generous dividends, and high market recognition.

Growth businesses that are expanding rapidly are unlikely to do this because they need all the capital they can get to help them grow. Startups are also less able to pay dividends because they may not yet be profitable. There are two statuses of stocks for dividends from a single company: Cum-Dividend and Ex-Dividend.

Cum Dividend (cum dividend stock): The English abbreviation is CD. The status of this type of stock is that the company announces that it will pay dividends in the future, but the specific amount and time have not yet been determined. At this time, if the investor purchases the CD stock, he or she will gain the right to receive future dividends.

If the investor sells the CD stock, he or she will lose the right to receive future dividends. Ex-Dividend: The English abbreviation is ED. The status of this type of stock is that the company has clearly stated that it will pay a certain percentage of dividends on a specific date in the future.

When this date is determined and announced, shareholders who have registered information can still receive dividends on the dividend payment date even if they sell their stocks. However, shareholders who purchase stocks after the ex-dividend date cannot receive this dividend.

If they still hold the shares before the next ex-dividend date, they can receive the next dividend payment. Dividend ETFs This is one way to invest in a basket of shares of public companies that pay dividends and can be traded like a stock, with prices changing frequently throughout the trading day.

Professional managers study the market and invest in reasonable stocks. Usually they prefer to invest in the stocks of established companies with a long history of dividend payment, which is more conducive to investors diversifying investment risks.

Dividend ETFs are created to earn high returns while investing in stocks of high-dividend companies, or real estate investment trusts (REITs). Dividend ETFs may contain only U.S. company stocks, or they may be international, global dividend ETFs. Like dividends from stocks, dividends from dividend ETFs will also be distributed according to a set schedule.

The frequency of dividends can be monthly, quarterly, half-yearly, or even annually. Dividends are first paid by the company to the fund and then to investors. Of course, investors need to pay the manager an additional fee. Like the fees of ordinary ETFs, the additional fees here refer to the fees paid by investors to directly purchase dividend stocks.

Purchasing ETFs will incur fees with the fund manager, which is also one of the transaction costs.

Investors should carefully study the terms and conditions applicable to the specific dividend ETF being considered and ensure that the frequency of payments and dividend receipts is appropriate for their investment strategy before actually purchasing. What Dividend Stocks are there? Here are a few good dividend stocks: Annaly Capital Management Inc.

(NLY) Dividend yield: 9.69% Market cap: $12.9 billion Annaly Capital Management is a diversified capital management firm that invests primarily in individual residential and commercial assets. Its investment strategies include agency mortgage-backed securities, residential and commercial real estate, and middle market loans.

The company's total assets are approximately US$100 billion. Home Depot (HD) Dividend yield: 2.1% Market cap: $345 billion Home Depot is America's leading home improvement retailer with nearly 2,300 brick-and-mortar stores. Annual sales are $140 billion. HD stock has surged 760% since 2011, while the S&P 500 has gained about 200% during the same period.

Meanwhile, the dividend has risen from 25 cents per quarter in 2011 to the current $1.65 per quarter. Equitrans Midstream Corp. (ETRN) Dividend yield: 7.35% Market cap: $3.6 billion Equitrans Midstream is a midstream energy services company.

Its business is focused on supporting natural gas development and transmission as well as storage systems, gathering systems and water supply services. Its major assets are located throughout the Appalachian Basin.

AGNC Investment（AGNC） Dividend yield: 8.03% Market cap: $9.7 billion AGNC Investment is an internally managed real estate investment trust that invests primarily in agency residential mortgage-backed securities on a leveraged basis. It finances its holdings through collateralized borrowings structured as repurchase agreements.

New Residential Investment Corporation (NRZ) Dividend yield: 7.46% Market cap: $4.8 billion New Home Investment is a mortgage REIT. It provides capital and services to the mortgage and financial services industries. The company invests in assets with stable, long-term cash flows.

OneMain Holdings (OMF) Dividend yield: 13.06% Market cap: $7.4 billion OneMain Holdings is a financial services holding company focused on consumer finance. OneMain, through its subsidiaries, originates and services secured and unsecured personal loans and offers a range of credit insurance products.

The company operates a network of 1,500 branches in the United States and offers a digital platform that allows customers to apply for products online. Greif (GEF) Dividend yield: 2.7% Market cap: $3 billion Industrial packaging and containers company Greif can be included in a dividend portfolio as a mid-cap stock.

It's a modest growth company with a 2.7% dividend yield, and analysts expect earnings per share to grow 10% annually over the next five years. GEF offers a good mix of income and steady growth.

The maker of steel and plastic drums, corrugated board, container liners and other behind-the-scenes packaging products has benefited from improved demand as the global economy recovers. Greif's products are used by a variety of industries, including the pharmaceutical, petroleum, food and beverage, and chemical industries. Coca-Cola Co.

(KO) Dividend yield: 3.2% Market cap: $230 billion Coca-Cola, which implemented its 59th consecutive annual dividend increase in February, now pays a quarterly dividend of 41 cents, up from 17 cents in early 2007 before the financial crisis and nearly double the 22 cents paid in early 2011 a decade ago. Intel Corp. (INTC) Dividend yield: 2.2%

Market cap: $263 billion Intel, with its strong intellectual property, is worth many times more than the small foundries that produce chips designed by others.

Its dividend has soared from 18 cents in 2011 to nearly 35 cents today, and because of the current boom in demand for semiconductor patents and the increasing demand for these products in the digital age, Intel will be a "buy and hold" stock forever. JPMorgan Chase & Co.

(JPM) Dividend yield: 2.4% Market cap: $453 billion During the 2008 financial crisis, many banks such as Citibank and Bank of America suffered heavy losses, while JPMorgan Chase became the most resilient financial stock on Wall Street.

Although it cut its dividend during the worst of the chaos, by 2013 it had returned to its pre-crisis payout level of 38 cents, and now pays a whopping 90 cents per share. What are some good Dividend ETFs?

Here are a few good ETFs that offer dividends: Invesco KBW High Dividend Yield Financial Portfolio (KBWD) KBWD achieves its high returns by focusing its portfolio on stocks of financial sector companies. It tracks the KBW Nasdaq Financial Sector Dividend Yield Index, which is made up of about 40 holdings.

These are primarily small-cap stocks in the financial sector. Its 30-day dividend yield is 12.93%, and its expense ratio is 1.58%. Vanguard High Dividend Yield (VYM) VYM tracks the FTSE High Dividend Yield Index. The fund represents nearly 400 stocks that generate high dividend yields. It has a yield of 3.77% and a minimal expense ratio of 0.06%, or $6.

iShares Core High Dividend (HDV) HDV offers a portfolio of approximately 75 U.S. dividend stocks. According to parent company BlackRock, all investments "have been screened for financial health." Its dividend yield is 4.67%; it has the lowest expense ratio at 0.08%.

Alerian MLP ETF (AMLP) AMLP is one of the largest funds playing a role in energy's tank operators, related pipeline companies and other companies supporting exploration operations, with nearly $6 billion in assets. Its dividend yield is 8.84% and its expense ratio is 0.9%.

iShares Select Dividend Index (DVY) DVY from BlackRock tracks an index of about 90 stocks that have a track record of paying dividends over the past five years. Its dividend yield is 4.61% and its expense ratio is 0.39%.

Invesco Zacks Multi-Asset Income (CVY) If investors don't mind paying higher fees for higher yields, CVY is a good choice, and the fund tracks a multi-asset index consisting of 149 stocks. Its dividend yield is 6.43% and its expense ratio is 0.97%. Vanguard Dividend Appreciation (VIG) VIG tracks the Nasdaq U.S.

Dividend Achievers Select Index, which covers about 182 dividend stocks. Its dividend yield is 1.98% and its expense ratio is 0.06%. Cambria Shareholder Yield ETF (SYLD) SYLD is an actively managed ETF that uses a quantitative approach to select U.S. stocks with high cash distribution characteristics. It screens U.S.

stocks with market capitalizations above $200 million. The fund is comprised of 101 of the top companies based on dividend payments and net share repurchases. It also screens for value and quality factors, such as low financial leverage. Currently, assets under management are approximately US$318 million.

Its dividend yield is 1.24% and its expense ratio is 0.59%. SPDR S&P Dividend (SDY)

SDY is one of the funds with the most reasonable fees. It tracks the S&P High Yield Dividend Aristocrats Index, which is composed of more than 100 dividend stocks. Its dividend yield is 3.44% and its expense ratio is 0.35%. Schwab U.S. Equity Dividend (SCHD) SCHD is a good choice for low-cost exposure to high-dividend U.S. stocks.

The fund tracks the Dow Jones U.S. Dividend 100 Index, which includes some of the highest dividend stocks in the United States. Its dividend yield is 3.80%. The expense ratio is 0.06%. What are Dividend Aristocrats?

Dividend Aristocrats can be translated as "dividend aristocrats" or dividend aristocrats, which means that like the aristocrats in dividends, they have a long history of dividend payment and have good credit and records, and have "noble blood". Similarly, it can also be called an "elite club".

Members of the club are companies with good dividend credit, and they are more favored by investors.

To become a member of the Club, a company must: At least 25 consecutive years of dividend increases; The shares issued by the company must be a member of the Standard & Poor's 500 Index (S&P 500); The company is worth at least $3 billion after each quarterly dividend; Average daily trading volume of at least $5 million during any consecutive three-month period; Who are the members of the Dividend Aristocrats?

As of January 2021, there are 65 Dividend Aristocrats members, as follows: Dividend yields in years in which listed companies (Ticker) continuously increased their dividends 3M (MMM) 63 2.92% AO Smith (AOS) 28 1.46% Abbott Laboratories (ABT) 49 1.52% AbbVie (ABBV) 4.48% AFL 38 2.35% Air Products and Chemicals (APD) 39 2.04% Albemarle (ALB) 27 1.02% Amcor PLC (AMCR) 3.76% Archer Daniels Midland Corporation (ADM) 47 2.22% AT&T (T) 36 6.49% Atmos Energy Inc.

(ATO) 34 2.44% Automatic data processing (ADP) 46 1.9% Becton, Dickinson & Co.

(BDX) 1.38% Brown-Forman Corporation (BF-B) 37 0.93% Cardinal Health (CAH) 3.47% Caterpillar (CAT) 1.74% Chevron (CVX) 4.92% Chubb (CB) 1.87% Cincinnati Financial (CINF) 61 2.1% Cintas Corporation (CTAS) 0.86% Clorox Company (CLX) 45 2.41% The Coca-Cola Company (KO) 59 3.11% Colgate-Palmolive (CL) 2.19% Con Edison (ED) 3.98% Dover (DOV) 65 1.3% Ecolab (ECL)

29 0.84% Emerson Electric (EMR) 2.16% Essex Property Trust (ESS) 2.93% International Expeditionary Force (EXPD) 1% Exxon Mobil (XOM) 5.71% Federal Real Estate Investment Trust (FRT) 3.72% Franklin Resources (BEN) 40 3.3% General Dynamics (GD) 30 2.45% Genuine Parts (GPC) 2.46% Hormel Foods (HRL) 55 2.06% Illinois Tool Works (ITW) 50 1.92% International

Business Machines Corporation (IBM) 25 4.52% Johnson & Johnson (JNJ) 2.54% Kimberly Clark (KMB) 48 3.35% Leggett & Platt (LEG) 2.95%

LIN 1.43% Lowe's (LOW) 1.17% McCormick Company (MKC) 35 1.51% McDonald's (MCD) 44 2.2% Medtronic (MDT) 43

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