Knowing Dividends: Definition, Types, How to Calculate and Investment Tips
5/17/2022
For those of you who are interested and often read about the world of stocks, surely you are no stranger to dividends. Dividends are another advantage that can be obtained by investors apart from capital gains.
Usually the amount of dividends earned by investors varies, depending on how many shares they buy. Not only that, each company also sets a different amount of dividends.
Let's get to know more about dividends in this article!
Definition of Dividend
As previously mentioned, dividends are the distribution of profits from a company to the shareholders of the company. Simply put, if the company you buy shares in makes a profit, you can get a portion of the profit.
Therefore, the bigger the company whose shares you buy, the bigger the dividends you will get. However, there are times when a company does not distribute dividends, because the money will be used for business expansion or paying off company debt.
What are the Types of Dividends?
If you already know what dividends are, then we will discuss the types of dividends. This is important to know so that your knowledge about the world of investment can be even wider.
Here are the types:
1. Stock Dividend
Stock dividends are dividends that are divided in the form of shares, when this happens, the number of shares held by shareholders will automatically increase.
2. Cash Dividend
3. Interim Dividend
The third type of dividend is an interim dividend, this dividend is distributed to shareholders, before the company does the annual bookkeeping.
Usually distributed in the middle of the year and the end of the year. For example, PT Unilever Indonesia Tbk (UNVR) distributed interim dividends in June 2019 and also in December 2019
4. Property Dividend
Property dividends are a type of dividend that is often avoided by shareholders. This is due to the complicated calculation system.
5. Liquidation Dividend
This dividend will usually be distributed when the company is declared bankrupt. Usually caused by the company's cash reserves are not sufficient to continue business operations.
6. Deviden Script
Given in the form of debt securities stating that the company will pay dividends within a certain period of time.
With the issuance of a dividend script, automatically the company's liabilities will also increase and the interest expense will be more burdensome for the company.
How to Calculate Dividend?
Maybe some of you are wondering, then how do you calculate dividends? Here we provide details on how to calculate dividends:
The formula for calculating dividends: Dividend amount x number of shares
Mr. Andi owns company B shares with a total ownership of 100 thousand shares. One time the company could make a large profit and plan to distribute dividends with a nominal value of Rp. 50 to each investor.
Then Mr. Andi will get a dividend of:
IDR 50 x 100 thousand = IDR 5,000
How is the System for the Distribution of Stock Dividends?
Each dividend distribution, of course, has its own procedure. Starting from companies making dividend distribution announcements at KSEI and many more.
The following is the procedure for the stock dividend distribution system:
1. Declaration Date
Is the first stage that must be passed through the declaration date, the dividend distribution date will be announced by the company.
2. When You See
3. Ex Deviden
This is the date on which investors cannot get their dividend rights. If there are people who buy shares on the ex-dividend date, then that person will not get the right to distribute dividends.
4. Dividend Payment
The company will transfer to RDN (Customer Fund Account) automatically if it has entered the dividend payment date.
How to Find Stocks That Have Good Dividends
There are several tips that you can do so that your stock dividend investment can run optimally. Here are the tips:
1. Company Fundamental Analysis
The first tip you can do is to do fundamental analysis. Look at the company's financial condition, so that after the dividend distribution is made, the company's share price does not fall freely.
A healthy financial condition can certainly make stock prices remain stable, even after dividends are distributed. Usually blue chip stocks have strong fundamentals and the risk of loss is very small.
2. Pay attention to the Dividend Yield Ratio
Dividend Yield Ratio can show how much profit you can get from dividends.
The trick is to compare the value of dividends with the current share price per share. That way you can find out how much profit you can get.
3. Know When the Dividend Distribution Schedule
Cum date, ex date are things you have to pay attention to. Do not let you buy shares in the ex date period because you will not get dividends.
Buy shares before the cum date, that way you are entitled to the dividends that will be given.
How to View Dividend Schedule
You can visit the KSEI website to get complete information about the dividend schedule of each company.
Usually the amount of dividends earned by investors varies, depending on how many shares they buy. Not only that, each company also sets a different amount of dividends.
Let's get to know more about dividends in this article!
Definition of Dividend
As previously mentioned, dividends are the distribution of profits from a company to the shareholders of the company. Simply put, if the company you buy shares in makes a profit, you can get a portion of the profit.
Therefore, the bigger the company whose shares you buy, the bigger the dividends you will get. However, there are times when a company does not distribute dividends, because the money will be used for business expansion or paying off company debt.
What are the Types of Dividends?
If you already know what dividends are, then we will discuss the types of dividends. This is important to know so that your knowledge about the world of investment can be even wider.
Here are the types:
1. Stock Dividend
Stock dividends are dividends that are divided in the form of shares, when this happens, the number of shares held by shareholders will automatically increase.
2. Cash Dividend
The most common type of dividend, this dividend is distributed in the form of cash. However, the nominal amount of the dividend will be deducted by government taxes.
Usually investors can get dividends as much as 2-4 times / year. However, the distribution of dividends is uncertain, it all depends on the company's performance in that year.
Usually investors can get dividends as much as 2-4 times / year. However, the distribution of dividends is uncertain, it all depends on the company's performance in that year.
3. Interim Dividend
The third type of dividend is an interim dividend, this dividend is distributed to shareholders, before the company does the annual bookkeeping.
Usually distributed in the middle of the year and the end of the year. For example, PT Unilever Indonesia Tbk (UNVR) distributed interim dividends in June 2019 and also in December 2019
4. Property Dividend
Property dividends are a type of dividend that is often avoided by shareholders. This is due to the complicated calculation system.
5. Liquidation Dividend
This dividend will usually be distributed when the company is declared bankrupt. Usually caused by the company's cash reserves are not sufficient to continue business operations.
6. Deviden Script
Given in the form of debt securities stating that the company will pay dividends within a certain period of time.
With the issuance of a dividend script, automatically the company's liabilities will also increase and the interest expense will be more burdensome for the company.
How to Calculate Dividend?
Maybe some of you are wondering, then how do you calculate dividends? Here we provide details on how to calculate dividends:
The formula for calculating dividends: Dividend amount x number of shares
Mr. Andi owns company B shares with a total ownership of 100 thousand shares. One time the company could make a large profit and plan to distribute dividends with a nominal value of Rp. 50 to each investor.
Then Mr. Andi will get a dividend of:
IDR 50 x 100 thousand = IDR 5,000
How is the System for the Distribution of Stock Dividends?
Each dividend distribution, of course, has its own procedure. Starting from companies making dividend distribution announcements at KSEI and many more.
The following is the procedure for the stock dividend distribution system:
1. Declaration Date
Is the first stage that must be passed through the declaration date, the dividend distribution date will be announced by the company.
2. When You See
Cum Dividend is the date that determines whether the shareholder can get a dividend or not.
An example is like this, if Mr. Andi still holds shares until the cum date, then Pak Andi is entitled to dividends.
However, if Mr. Andi sells the shares before the cum date, then Mr. Andi is not entitled to the dividends to be distributed.
An example is like this, if Mr. Andi still holds shares until the cum date, then Pak Andi is entitled to dividends.
However, if Mr. Andi sells the shares before the cum date, then Mr. Andi is not entitled to the dividends to be distributed.
3. Ex Deviden
This is the date on which investors cannot get their dividend rights. If there are people who buy shares on the ex-dividend date, then that person will not get the right to distribute dividends.
4. Dividend Payment
The company will transfer to RDN (Customer Fund Account) automatically if it has entered the dividend payment date.
How to Find Stocks That Have Good Dividends
- Find information about any companies that will distribute dividends in the near future. You can check through the RTI application on your cellphone.
- Pay attention to the price, cum date and when the payment date is made.
- Buy the stock right before the cum date occurs. Buy stocks before 3 pm
- Pay attention to how much company stock you will buy
There are several tips that you can do so that your stock dividend investment can run optimally. Here are the tips:
1. Company Fundamental Analysis
The first tip you can do is to do fundamental analysis. Look at the company's financial condition, so that after the dividend distribution is made, the company's share price does not fall freely.
A healthy financial condition can certainly make stock prices remain stable, even after dividends are distributed. Usually blue chip stocks have strong fundamentals and the risk of loss is very small.
2. Pay attention to the Dividend Yield Ratio
Dividend Yield Ratio can show how much profit you can get from dividends.
The trick is to compare the value of dividends with the current share price per share. That way you can find out how much profit you can get.
3. Know When the Dividend Distribution Schedule
Cum date, ex date are things you have to pay attention to. Do not let you buy shares in the ex date period because you will not get dividends.
Buy shares before the cum date, that way you are entitled to the dividends that will be given.
How to View Dividend Schedule
You can visit the KSEI website to get complete information about the dividend schedule of each company.
