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Dividends iTrade

Dividend payments on the territory of Russia occur with a certain periodicity - once a year at a time, as in other developed countries, corporations pay dividends quarterly.


Basic concepts


Dividend is the part of the company's profit distributed between shareholders and other participants owning shares of stock. For 2020, the Russian stock market shows the highest dividend yield in the world.


We give a simple example: in 2020, the holders of shares of “Gazprom” can receive a 10% dividend yield, investing in stocks on 196,07 RUB per unit. Then fixed the amount of the dividend will be equal to RUB 19.6 per share. If you compare the situation with the US market, and there's dividend yield is 5%.


What is the procedure of payment and calculation of dividends


It is understood that the percentage of dividends directly depends on the overall profit of the company for the year. To see that part of the profit that aims to pay dividends in the documents on the dividend policy of the company or the corporate Charter. In different companies the percentage can vary significantly, with a range from 5% and up to 75% of the profits. Please note that not all companies consistently pay dividends, because when there is no profit, a portion of the proceeds could be redirected to expansion of the business.


The procedure of payments and accrual of dividends begins with the Board of Directors considers issues related to the allocation of profit, specifying the amount of dividends and date of closure of the register of shareholders.


After the meeting, the shareholders decide whether they payout or not. If the shareholders do not like the decision of the Directors, they are against the Board. If the shareholders agree, then set the date and it gives a guarantee that the dividends will still be paid.


Further, in the approved date of the register of compilation of the list of shareholders eligible for receiving dividends, then the company pays dividends in national settlement Depository. And only in the Depository dividend transferred to brokers, who in turn pay their shareholders. Since dividends are considered to be the rightful type of earnings, the issuing Bank collects from shareholders income tax at the rate of 13%.


How to become a shareholder and receive dividends

To obtain dividends you must register on the website of the broker and iTrade to open a personal account, then you can contact the Manager to request a list of available offers for dividends. Selecting the company you will be able to make the necessary amount and to purchase the securities (stock), go through the procedure required two days before closing the register of shareholders. Such time limits are in Russia, because they are caused by the mode of trades T+2 trading mode is similar to the work in America.


According to the principle of T+2 you can become a shareholder after two days, after the purchase of the securities. After this procedure, the dividends come to you for a personal account after 25 working days from the date of closing of the register.


The principle of identifying dividend shares


Before you start shopping for dividend stocks, it is necessary to pay attention to the history of dividend payments as a steady and regular payment of say about th financial stability of the company.


A good example might be the famous Russian oil company “LUKOIL”, where dividends are paid not only stable, but also show the increase of yield in each new year. Starting in 2012, LUKOIL is steadily paying out dividends to investors twice a year.


Another important step of becoming a shareholder is the analysis of profitability dividends compared to other similar companies in the market, so how can it be that the amount of dividends on the Issuer significantly less than other similar companies. In such a situation it is necessary to pay attention to the basic multipliers of companies and financial performance of companies.


How to understand cutoff dates and amount of dividends


All companies whose securities are on the stock exchange forced to publicly disclose information about any such decisions taken. On the websites of a huge number of Russian banks-issuers have a section “Investor relations” where you can find up to date information about the relevant company.


Every year on the territory of the Russian Federation there is a huge number of various support services to investors, where in free access is published for shareholders relevant information from issuers. In this example, to serve as the site of the broker iTrade, where each customer can select for themselves the company and to receive the latest news.


In addition, customers of the broker iTrade can become holders of securities and to earn not only on the difference of stock prices and the positive interest of profitability, the dividend paid by the company.


How to make money on the dividend trade


A unique mechanism for the payment of dividends is not, however, there is another way of speculation, allowing you to earn a much greater amount. To do this, we developed two strategies:

  • speculative, where income is the sum of the paid dividends;
  • when investment income depends on changes in the value of shares, as the closer the dividend cut-off, the more expensive the action.


If you think that you will be able to acquire securities under a dividend to wait for the cutoff and sell them for the same price - you will not leave, because the next day after the cut-off value of the stock fall to the dividend amount, after which prices will recover long enough.


Want to get the dividend?


Write an email with the subject - 'Dividend', with the number of your trading account, in support of [email protected].