how do dividends on stocks work? how long does one have to hold the stock in order to get a dividend check?

Answer 1

normally stocks if they pay dividends--many do not--pay them 4 times a year. Some closed end funds actually pay monthly. The shortest period of time that you can own a stock and receive the dividend is one day. Each dividend has an ex-dividend date. You can find that on Yahoo finance. If you purchase the stock the day before the ex dividend date and sell it on the ex dividend date, you receive the dividend. However, the price of the stock on the ex dividend date reflects the lack of dividend. In other words if the dividend is 50 cents a share then the price of the stock will drop by 50 cents on the ex dividend date.

Many companies raise their dividend regularly, once a year. BAC and C and JNJ and MMM are examples of companies that have a record of doing so.

Answer 2

If you buy common stocks, the prospectus usually tells about the historical payment of dividends. That will tell you what the company's track record is. In many cases, solid dividend paying companies have a long track record of paying a quartery dividend (4 times per year). Great companies are able to increase that dividend when things are going well. You will want to avoid stocks that are in danger of cutting dividends (Ford, GM, etc)

You should be able to do a screen to get a list of companies that pay a dividend and who's stock price is going up. That way you get a double return. The stock price goes up and you get a dividend too.

An important issue with this is that currently dividends are taxed at a lower rate than income. If you hold the stocks over one year, the gain on the investment is also taxed at a lower rate than other income.

Buy a few great stocks that pay good dividends and hold them over a long period of time and you can get rich.

Answer 3

You must hold the stock until the Ex-Dividend Date to receive the dividend. On that date all owners of the stock are recorded and sent the dividend a few days later.

Answer 4

A stock dividend is money that a company you own stock in gives to the shareholders from money they earned during the year or in prior years. If they have no accumulated earnings, then it is a return of your stock value(non-taxable return of capital). In order to receive the dividend you have to own the stock on the day the dividend is declared - also known as the ex-dividend date.

Answer 5

You must own the stock for the ex-dividend date (every stock has a different date) in order to collect the dividend.

How do they work? The owners of the company (stockholders) are often times given profits in the form of dividends (they'll send you a check in which you can cash or buy more shares of stock).

Answer 6

I get dividends quarterly. It might be different depending on the type of stock you have.