If you have a question that isn’t answered below please send us an email to [email protected] and if we feel it’s of general interest we’ll include it here.
- How is the dividend yield calculated?
- How long do I have to own a stock to receive the dividend?
- I am having trouble logging in
- I have received information on a Dividends Reinvestment Plan, what is it and should I participate?
- What are hybrid securities?
- What are imputation credits?
- What are Tax deferred dividends?
- What information do you maintain in my file?
- What is The Intelligent Investor?
- What is an income stock?
- What is the difference between a Trust and a Company?
How is the dividend yield calculated?
The yield is calculated by dividing the total yearly dividend of the most recent year by the current share price. e.g. a stock that pays two 5-cent dividends over the year and is trading at $2.00 offers a 5% yield.Back to Top
How long do I have to own a stock to receive the dividend?
If you buy a stock before the ex-date, you're entitled to the dividend. If you buy it on or after the ex-date, then you will not receive the current dividend.
Generally, the stock will drop on the ex-dividend date by an amount roughly equal to the dividend (and any associated franking or tax credits).
I am having trouble logging in
I have received information on a Dividends Reinvestment Plan, what is it and should I participate?
A dividend reinvestment plan (DRP) is the offer by a company to take dividends in the form of extra shares in the company rather than cash. Those shares are acquired without brokerage and often at a small discount to the stock’s current market price. But, the tax office still requires you to declare the income and any associated franking credits in your tax return. For a more detailed explanation of DRP’s and whether or not you should participate see our education article Dividend reinvestment plans explained Dividend reinvestment plans explained.Back to Top
What are hybrid securities?
Hybrid securities are so named because they display characteristics of both debt and equity, although we’d suggest they usually behave more like debt than equity. These securities are usually fixed rate and vary greatly depending on the details of the issue so always read the fine print before investing.Back to Top
What are imputation credits?
Imputation credits relate to Australia's system of dividend franking. When a franked dividend is paid, imputation credits are passed on to the shareholder along with the cash. The imputation credit entitles the investor to a rebate for tax already paid by the company. This avoids the double taxation of corporate earnings that occurs in some other countries, including the USA.Back to Top
What are Tax deferred dividends?
This is a complex issue, and applies to dividends distributed from a trust rather than a company (see below for the answer to why a trust is different to a company). We have explained the issue using a property trust as an example in our education article Tax aspects of listed property trusts.Back to Top
What information do you maintain in my file?
We keep your name and address details in our database for the purpose of providing the services you request. We may also keep your telephone and email details if you provide them to us. We may also keep a record of any correspondence between you and us, including, but not limited to, emails, telephone conversations and letters. At any time, you may change or remove your details by contacting us.
We may from time to time inform you of special offers, or ask your opinion of our services, but you may opt out of receiving any of these offers by contacting us. We will not share your personal information with any third party without your express permission. The Intelligent Investor respects your privacy and abides by the Privacy Act 2002.
What is The Intelligent Investor?
The Intelligent Investor Publishing Pty Ltd publishes The Intelligent Investor sharemarket newsletter, available by subscription, and several associated websites, including The Intelligent Investor (www.intelligentinvestor.com.au), New2Shares (www.new2shares.com.au), Most Banking (sbup.com), Directors Transactions (www.directorstransactions.com.au) and www.WarrenBuffett.com.au. We may also publish other websites from time to time.Back to Top
What is an income stock?
Income stock is a generic term for stocks focused on providing regular income. We have identified 10 characteristics of income stocks which are discussed in detail in our education article 10 features of income securities 10 features of income securities.Back to Top
What is the difference between a Trust and a Company?
A trust must distribute all income to unit holders, and that income isn’t taxed at the trust level, but passed through to the unit holders and then taxed. Companies are taxed on profit but then are able to distribute associated franking credits.Back to Top