How to calculate
1. Determine the number of shares you own. Information is available in your broker's personal account.
2. Find out DPS (dividends per stock). This is the amount that holders receive per share. You can calculate it yourself, but it’s more convenient to look at dividend calendars. For example, here or here.
3. Multiply DPS by the number of shares you own. The resulting indicator is profit in the form of dividends.
To evaluate a company, study its dividend policy. It can be different:
- Sberbank has established that it will consistently increase the amount of dividend payments to 50% of net profit over three years.
- Lukoil believes that it is necessary to regularly allocate at least 25% of consolidated net profit to pay out.
- NLMK says that if the Net Debt/EBITDA ratio is less than or equal to 1.0: the level of dividend payments is within the range of 50% of net profit and 50% of free cash flow. If the Net Debt/EBITDA ratio is above 1.0: the level of dividend payments is within the range of 30% of net profit and 30% of free cash flow.
Dividend yield
Dividend yield is usually calculated from the moment the stock is purchased.
Example of dividend yield calculation
Let's return to our example with the Gazmyas-Neftesvyaz dividends, the oligarch Vasya and the student Petya.
As I already said, Vasya owns 300,000 shares of the company, and Petya owns 10 shares. Petya bought shares a year ago at 1,000 rubles per share, and Vasya bought shares six months ago at 1,100 rubles per share. Let me remind you that in our example, dividends for the year amounted to 100 rubles per share.
Dividend yield is calculated using the formula:
Dividend yield = Dividend/Purchase price*100%
Thus, Petya received 10% of the absolute dividend yield for the year (bought at 1,000 rubles per share, received 100 rubles per share on top in the form of dividends a year later), and Vasya received 9.09% of the absolute dividend yield, but for six months (bought at 1,100 rubles per share, six months later I received 100 rubles per share on top in the form of dividends). If we calculate it as a percentage per annum, then Petya received a dividend yield of 10% per annum, and Vasya - 18.18% per annum.
How to get
For the sake of dividends, you do not need to do any additional actions. It is enough to be a shareholder and follow the company's news.
It all starts with the publication of a profit report for the year. Most often it comes out in the spring. Dividends are paid from profits, so it is important to know its size. Next, read the dividend policy; if it is not there, then wait for statements from the company’s first person.
After this the official part begins. The board of directors proposes to allocate a share of profits to dividends and indicates the date on which you need to be a shareholder of the company. There are a few important dates:
- Declaration date. On this day, the board of directors publicly informs shareholders how much dividends will be paid.
- Register closing date (dividend record date). This is the day on which the list of persons receiving the payment is determined. To expect to receive a profit, you must become a shareholder before this date.
- Ex-dividend date. From this day on, the company's shares are sold without the right to dividends.
- Payment date. On this day, security holders receive money.
The delivery mode is also important for the investor. For example, the Moscow Exchange has a T+2 mode. This means that you are not included in the register at the time of purchase, but two business days after that. For example, we bought shares on March 3rd, but became the owner on the 5th.
Therefore, shares must be taken no later than two days before the closing date of the register and take into account weekends.
Examples:
- The register of shareholders closes on Friday - shares must be purchased before Wednesday.
- The register closes on Monday - you must purchase before Thursday.
- The register closes on Friday, but Thursday and Wednesday – public holidays – must be purchased before Monday.
When will the money arrive in the account?
In Russia, after closing the register, the company transfers money to the shareholder within 25 working days. By default, they go to the brokerage account. But now brokers agree to pay clients dividends directly to their bank cards. Prices and conditions for such services must be clarified with the company.
On the US stock market, the delivery mode is T+3 - the investor is recognized as a shareholder three days after purchasing the security. And the payment date is clearly defined in advance.
Which companies pay stable and high dividends?
I'll tell you how to select stocks for a dividend portfolio. In general, I recommend holding shares of 5-7 companies from different industries in order to diversify risks.
In order to select companies that consistently pay generous dividends, which, moreover, tend to increase payments year after year, we will use the service from dohod.ru.
Let's sort companies by payment stability index (DSI):
And we go from top to bottom, selecting stocks with high payout yields (from 10%), so that they are from different industries, until we have 5-7 src=»https://alphainvestor.ru/wp-content/uploads/2019 /09/Otbor_dividendnih_aktsiy.jpg" class="aligncenter" width="600″ height="560″[/img] At the moment, such a dividend portfolio might look like this:
- TGK-1
- Tatneft (p)
- Tattelecom
- Norilsk Nickel
- Sberbank (p)
- Saratov Refinery (p)
- Alrosa-Nyurba
*(p) – means that it is worth taking preferred shares. After preliminary selection, look at a summary of the issuer’s dividend history by clicking on the company name in the service.
An example of an ideal dividend security is TGK-1 shares. Just look at this beautiful graph of dividend payout growth:
Here we see a description of the company's dividend policy.
To make a final decision on purchasing a particular stock, I recommend studying the information about the company in as much detail as possible - reporting, analytics, news, rumors, gossip, etc. This is not necessary, but can sometimes prevent you from making bad decisions.
Payment terms
There are no strict requirements for how often a company must pay dividends. It can do this at any time under two conditions: the presence of net profit and the decision of shareholders.
Stable and large companies establish clear dividend payment algorithms. They know they will be able to make regular payments to shareholders.
Small companies are not confident that they can make payments consistently. Therefore, they put aside profits in a “box” and then decide where to allocate the funds. Either for development or for dividends.
The Russian stock market is developing, and most companies are growing. Therefore, dividends are often paid once a year. But there are a few big figures that are calculated quarterly. For example, Severstal, NLMK, QIWI.
We take dividends into our table
To take the entire table of dividends for yourself (in case someone really needs it), we write the following formula:
=IMPORTHTML("https://www.dohod.ru/ik/analytics/dividend/sber","table", 2)
Google sheets will show a long footcloth. Divas statistics for the last 20 years!
Sber dividend statistics since 2000
But we only need one cell from the entire table - divs for 12 months. The rest is garbage. How to get it?
Let's modernize the formula a little - adding the INDEX operator and writing the desired cell address from the Income table (second line - second column). And the formula will look like this:
=index(IMPORTHTML("https://www.dohod.ru/ik/analytics/dividend/sber","table", 2),2,2)
As you can see in the picture above, everything worked out. ))) But …
Prescribing a separate path to the page in the formula each time, changing the ticker manually, is not very convenient. Therefore, we will make some minor changes to our formula.
=index(IMPORTHTML("https://www.dohod.ru/ik/analytics/dividend/"&(LOWER(B2)),"table", 2),2,2)
In formula B2, this is the address of the cell in your table where the ticker symbol of the desired stock is written.
The picture below shows how it turned out for me. In the table in column “B” I entered the required tickers and copied the formula in column “C” below.
Automatic receipt of the amount of dividends on shares
Taxation
13% - for residents of the Russian Federation 15% - for non-residents
- If the company pays in rubles, they go to a brokerage account, bank account or IIS (individual investment account) with taxes already removed. There is no way to avoid losses - tax deductions do not apply to dividends.
- If a company pays in dollars, taxes are not deducted - they must be calculated independently, taking into account the exchange rate.
When investing in US securities, it is better to sign Form W8-BEN. It tells you that you are not a US tax resident. With it the rate is 13%. 10% is withheld automatically, and the investor pays 3% himself.
Dividend loss
Some investors think that when working with dividends, you can cheat: buy shares for one day, receive a payment and sell. But such a scheme will not bring profit, because the share price falls on the day the register is closed by the amount of payment (dividend gap) and recovers for several months. You will first receive dividend income, and then lose about the same amount on changes in the stock price. You won't be able to make money.
Don't make a fuss. Evaluate the company fundamentally and buy for the long term. So, you will earn both on dividends and on changes in the market value of the stock.
Where to look for payment dates
Information about the payment amount and register dates can be viewed on the Moscow Exchange website (in the company’s information card) or on the websites of the companies themselves (if there is a section “For Investors”). Also use dividend calendars - it’s more convenient.
- Dividend calendar Dokhod.ru – publishes data on Russian companies.
- Calendar from BCS is a convenient calendar from the largest Russian broker. The table can be filtered by instruments, economic sectors and individual parameters.
- NASDAQ Calendar - here is information about American companies.
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