To get a dividend, you need to buy the stock before the ex-dividend date. If you buy on or after the ex-dividend date, the seller gets that payment. Since U.S. stocks moved to one-day (T+1) settlement in May 2024, the ex-dividend date and the record date are usually the same day.
- Declaration date: the company announces the dividend.
- Ex-dividend date: buy before this day to get the dividend.
- Record date: the company checks who is on its list of shareholders.
- Payment date: the cash arrives in your account.
- Dividend yield = yearly dividend ÷ share price.
What are the four dividend dates?
| Date | What happens |
|---|---|
| Declaration date | The board announces the amount and the dates. |
| Ex-dividend date | The first day the stock trades without the dividend. |
| Record date | Shareholders on the company’s books on this date get paid. |
| Payment date | The dividend is paid. |
What is the difference between the ex-dividend date and the record date?
Trades take time to settle. With T+1 settlement, a purchase settles one business day later. For most dividends, the exchange now sets the ex-dividend date on the record date. Buy the day before the ex-date and you are on the books in time. Buy on the ex-date and you are not.
Very large special dividends can follow different rules, so check the company’s announcement.
Why does the stock price drop on the ex-dividend date?
On the ex-date, new buyers no longer get the dividend, so the stock often opens lower by about the dividend amount. Other market moves can hide this, but it is why buying just before the ex-date is not free money.
How do I calculate dividend yield?
Dividend yield = yearly dividends per share ÷ share price. In a hypothetical example, a company paying $0.50 every quarter pays $2.00 a year. At a $50 share price, the yield is $2.00 ÷ $50 = 4%.
A very high yield can mean the share price has fallen a lot, or that it includes a one-time special dividend. That is why Trade Conquest’s Ex-Dividend This Week page leaves out yields above 25%.
How often are dividends paid?
Many U.S. companies pay quarterly. Some pay monthly, twice a year or once a year, and some pay one-time special dividends. Dividends are never guaranteed and can be raised, cut or stopped.
Frequently asked questions
When do I need to buy a stock to get the dividend?
Buy before the ex-dividend date. If you buy on or after the ex-dividend date, you will not get that dividend.
Do I need to hold the stock until the payment date?
No. If you owned the stock before the ex-dividend date, you get the dividend even if you sell on or after the ex-date.
Are the ex-dividend date and record date the same?
For most U.S. dividends since T+1 settlement began in May 2024, yes. Very large special dividends can have different rules.
How is dividend yield calculated?
Divide the yearly dividends per share by the share price. For example, $2.00 a year on a $50 stock is a 4% yield.
More guides
Keep learning with these related guides, or see every guide and tool on the Learn page.
Sources
- Investor.gov (SEC): Ex-Dividend Dates
- FINRA: Dividend Dates
- SEC: Rule change shortening settlement to T+1
Not financial advice. This article is for educational purposes only and is not financial, investment, legal or tax advice. It is published by Trade Conquest, owned and operated by Nite Cat, LLC, 2885 Sanford Ave SW #35064, Grandville, MI 49418. Rules change; check the cited official sources for the latest version. Investing carries a risk of loss. Trade Conquest does not recommend buying or selling any security.