How to Determine How Often a Dividend Is Paid
Dividends are a distribution of a company’s earnings to shareholders. A company’s board of directors decides whether to pay a dividend. A company must have positive retained earnings on its balance sheet and typically needs sufficient cash to meet its other expenses before paying a dividend. A company can pay dividends at various frequencies, such as quarterly, semiannually or annually. Some dividends, such as a special dividend, occur only once. Most companies pay dividends quarterly. You can find out a company’s dividend frequency using its annual report.
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Instructions
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Obtain a public company’s 10-K annual report from either the United States Securities and Exchange Commission’s EDGAR online database (see Resource) or from the investor relations section of the company’s website.
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Find the section of the annual report in which the company discusses its dividend policy. It contains the guidelines it uses to determine the amount and frequency of its dividend payments.
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Identify from the company’s dividend policy the frequency of its dividend payments. For example, if the company’s dividend policy states that it pays a quarterly dividend, the company would pay a dividend once per quarter or approximately once every three months.
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Find the dates of the company’s dividend payments it made during the year of the annual report if the company does not state a specific dividend policy or payment frequency. Some companies do not disclose their dividend policy to investors. Determine how often these payments occurred and assume that the company’s future dividend payments will occur at approximately the same intervals if it continues to pay a dividend. For example, if a company paid dividends on March 31, June 30, Sept. 30 and Dec. 31, the payments occurred quarterly. If the company were to pay future dividends, you could assume that it would pay them on a quarterly basis.
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Tips & Warnings
Because a company is not required to pay dividends, its dividend frequency may change despite its dividend policy or past payments.
