How dividends are calculated
If a company or exchange-traded fund (ETF) decides to pay a dividend, generally the total dollar amount that the company or ETF is paying out is divided by the number of eligible shares or units. How much you get usually depends on how many units or shares of that investment you own on the date that eligible shareholdings are calculated—this is called the 'ex-dividend' date.
Dividend payments for American depositary receipts (ADRs) are calculated on the amount of receipts you owned on the ex-dividend date.
Ex-dividend date
If you own shares, units, or receipts in an investment before the ex-dividend date, you’re entitled to the next dividend payment. If you invested on the ex-dividend date, or after, the current dividend payment would be paid to the previous owner of the shares, units, or receipts. If you’re an existing investor in a company, and buy more shares, units, or receipts on the ex-dividend date, you’d only be entitled for the dividend payment based on the shares you owned before the ex-dividend date.
For example: when you buy a share, there’s someone selling a share on the other side of the trade. If the ex-dividend date is 31 August, and you buy the share on this date, usually the dividend belongs to the seller. If you’d made the purchase on 30 August, the dividend would be usually paid to you.
Gross dividend yield (GDY)
The gross dividend yield (GDY) is all of the dividend payments for the past year per share divided by the current share (or unit) price, and then shown as a percentage. It’s important to remember that past performance does not guarantee future returns—this applies for dividends as well. But, the GDY percentage can show you a representation of the historical returns in relation to the current share or unit price.
When dividends are paid
Not all investments pay regular dividends. They might decide to reinvest the money instead of paying it out as a dividend. Sometimes they choose not to pay dividends at all.
See upcoming dividends for a company by selecting the investment in Sharesies > Gross dividend yield > Upcoming dividends.
How you’re paid dividends
Cash dividends are paid into your Sharesies Wallet. US dividends are paid in USD, Australian dividends are paid to you in AUD, and New Zealand dividends are paid in NZD.
Some investments offer a dividend reinvestment plan (DRP). If you opt in to a DRP through Sharesies, you’ll receive shares instead of a cash payment when a dividend is issued.