Dividend involves the company paying out part of its profit to you as a shareholder.
You get a share of the profit for each share you own.
Many companies do not pay dividends; dividends are usually paid by larger, stable companies.
The dividend is usually paid once a year, but nowadays, companies are increasingly paying several dividends per year.
The dividend is usually paid in the spring, a few days after the Annual General Meeting. In some cases, the company decides on an extra dividend, which results in greater dividends for you as a shareholder.
How does it differ from Dividend yield?
Dividend yield (%) is (Dividend per share/share price) which gives the ratio as a percentage.
Dividends are in SEK or the currency that the company reports.
Things to keep in mind
- Dividends usually provide a stable income from the company even if the share price falls.
- The company decides on the Dividend itself, which may mean that the dividend is reduced or stopped completely.
- Combine with the key figure Dividend Payout (%) to see how much of the profit is reallocated to dividends. If the dividend share is over 100%, it is a warning sign that the company gives more in dividends than it obtains in profit.
- If you plan to hold a share for an extended time period, the dividend will be the only cash flow you receive until you decide to sell the share.