Dividend Calendar — Essential Dividend Dates

When you invest in bonds or bank instruments like CDs, Money Market Accounts, Savings Accounts, etc. computing interest on your capital is fairly straightforward. Your investment accrues interest every day even though it may be paid to you monthly, quarterly or annually.

Dividends, however, are a whole different ball game.

Dividends are not legal obligations. Rather, a company's board of directors makes the decision of whether or not to pay a dividend.

The question of who gets a dividend is tied to some important dividend dates that we will get into below.

Important Dividend Dates

The key pieces of information to understand the dividend payment process are as follows:

• Declaration Date: This is the date the company's board of directors announce that a dividend will be paid.

• Record Date: When a company announces that it's paying a dividend, it also specifies another date called the record date. Only those shareholders who own the stock on the record date will get the dividend.

• Payment Date: This is the date when the company will actually mail out or electronically deposit the dividend. This date is usually a couple of weeks after the record date to account for the time it takes to process the dividend payments.

• Ex Dividend Date: This is the most important date in the dividend payment process. In the U.S., it's two business days before the record date. To be eligible for the dividend, an investor must purchase the stock before the ex-dividend date.

So What is the Dividend Calendar?

Now that we understand the different dates that make up the dividend payment process, let's look at a special type of calendar that relates to these dividend dates.

This is an online calendar that is continuously updated with ex-dividend dates of companies. For example, if you click on April 23, 2010, you will find a list of companies that have April 23rd, 2010 as their ex-dividend date. The Washington Post (WPO) and Colgate Palmolive Co. (CL) among other companies happen to be on that particular list.

Where Can You Find a Good Dividend Calendar?

The internet abounds with such calendars. Personally, we like the TheStreet.com's Calendar.

Understanding Dividend Dates With An Example

Let's look at a real-life example for these dates to make sense.

Consider this press release from Colgate-Palmolive.....

The date of the press release, Feb. 4th, is the declaration date. The press release specifies Apr. 26th as the record date and May 14th as the payment date.

The ex-dividend date? Two business days before the record date takes us to Apr. 22nd.

To wrap up, we covered some important dates pertaining to the dividend payment process. We talked about the dividend calendar and walked you through an example to understand dividends dates.

This should give you a good basic understanding to help navigate the dividend path.

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