A dividend is the portion of a corporation’s profits distributed to shareholders in accordance with a resolution passed by the annual shareholders’ meeting. The dividend yield is a metric that represents the percentage of a corporation’s paid-out profits relative to its stock price. However, the size of a dividend yield does not indicate anything about the quality of a company. Many highly successful companies reinvest as much of their profits as possible in research and development and tend to be cautious about paying dividends – such decisions are referred to as dividend policy. If, for example, a company succeeds in launching innovative products in this way, shareholders may not benefit from a high dividend, but they do benefit from the rising price of the company’s stock.
How do I receive my dividend?
If shares are held in a securities account at a financial institution, the bank handles the dividend payment. The dividend amount is usually stated in euros per share. Whether a dividend is paid and in what amount is proposed by the board of directors and decided by the annual shareholders’ meeting. The dividend is usually paid out the day after the annual shareholders’ meeting.
