How Often Are Dividends Paid For Stocks And Why The Company Matters?
The simple answer to How often are dividends paid?: Quarterly. Companies will typically announce a dividend payment each time they release earnings, which happens to be quarterly. There are two key factors if company will pay dividends. First, is the company is willing to pay dividends, and secondly does the company have the cash on hand to do so?
Is a Company Willing to Pay Dividends?
Almost all growth stocks do not pay dividends. One large reason for this is because many growth companies are unprofitable. Their Earnings Per Share (EPS) is negative because the overall expenses are greater than the income. Basically they have no extra cash around to pay dividends in the first place and are focused on getting profitable.
Alternatively, if the company is profitable some may still elect to not pay dividends to its shareholders. For example, if the company is a growth stock it might want to reinvest any profits in itself rather than paying it to investors. The reason companies do this is because they think they can get better returns for their investors by reinvesting the cash into themselves. They have faith that their company will continue to grow and the reinvested cash helps fuel that growth.
Key Takeaway: How often are dividends paid?
Typically companies will pay Quarterly dividend payments to their shareholders. This all depends on whether the company is willing to pay dividends in the first place. Many Tech companies are classified as growth so they will not pay dividends to but reinvest that money into growing the company. Additionally any company will only pay dividends if they have enough extra cash to do so.
One Secret to Finding Great Companies: How often are dividends paid historically for a company?
In one of Warren Buffett’s favorite books The Intelligent Investor it talks about dividend payments as one of the keys to a fundamentally high quality company. In the intelligent investor the author Benjamin Graham recommends that a company have an uninterrupted dividend record for the past 20 years. That means never missing a dividend payment for any of the last 20 years. This is one of they ways Warren Buffet has been able to pick such great companies for the long term.
In today’s market there are a large number of new companies that have been around for less than 20 years so how does this apply? Maybe you take the rule and apply it by looking at a companies historical dividend payments. If they have been consistent and never have missed a payment since they started issuing dividends, then this could be a good sign that it is a great company.
How Often Are Dividends Paid For A Stock: The Number 1 Tool where you can find all historical dividend payments!
At YP Investors we focus on Stock Analysis Tools. We have both technical and fundamental analysis stock tools. One of our best tools is the Stock Selector. When you enter a stock symbol in this tool we generate the key technical and fundamental data you need to know, now including all the historical dividend payments.
In the screenshot of the Stock Selector tool below, you can see the table of dividend payments for any stock, visually answering the question how often are dividends paid? Signup for our Free-Trial Membership today and try our stock analysis tools at no cost!
Quick Summary of Dividend Payments
We explained the answer to how often are dividends paid, quarterly. Again this is mainly because companies release financials quarterly and at that time announce any dividend payment they elect to pay shareholders. We found that some companies (i.e. growth stocks) will not pay any dividends because they are not profitable yet or are reinvesting in themselves.
Finally we showed the key to finding great companies is to find the ones that have consistent dividend payments for over 20 years. You can find all historical dividend payments on YP Investors Stock selector tool. We hope we have helped you grow your investing knowledge so you can be successful. Good luck on your investments!