Complete Guide to Dividends: 2023 Calendar and Key Concepts for Investors

Introduction to the 2023 Dividend Calendar

In the current financial markets context, understanding the importance of the dividend calendar is essential for any investor looking to maximize their returns. As of July 2023, a wide range of large corporations are prepared to distribute remunerations to their shareholders, from tech giants like Apple, Microsoft, and Meta, to globally relevant financial institutions such as JP Morgan, Santander, and PayPal.

What Do Dividends Represent in an Investment Strategy?

Dividends are the compensation investors receive for placing their capital in a particular company. They are portions of profits that organizations distribute among their owners, proportionally according to the number of shares they hold. This practice creates a significant incentive to attract and retain capital, which is why many companies strive to maintain attractive distribution policies.

There are corporations especially recognized for their commitment to shareholders, classified as “Dividend Aristocrats,” which have maintained consistent payments for over two decades, increasing them year after year.

Payment Modalities: Cash versus Shares

Companies generally choose between two mechanisms to deliver dividends. The most common modality is cash, as investors prefer to receive liquid capital rather than further fragment their shareholding.

Within this classification, we find:

Fixed Dividend: Corresponds to the predetermined monetary amount approved by the Shareholders’ Meeting, payable in a set figure.

Flexible Dividend: Offers shareholders the option to choose between cash payment, new shares, or a combination of both options.

There is also a second categorization based on the nature of the payment:

• Ordinary: Paid according to normal business projections
• Complementary: Paid once forecasts are confirmed, especially when they exceed initial expectations
• Extraordinary: Arises from one-time income, such as asset sales or business participations

Critical Dates in the Dividend Calendar You Need to Know

To avoid being excluded from payment or losing collection rights, it is crucial to master these four key dates:

1. Declaration Date: The moment when the Assembly approves the distribution, setting the amount and subsequent dates.

2. Record Date: Determines which shareholders are entitled to the payment. You must be a holder at this time to qualify for the payout.

3. Ex-Dividend Date: The decisive cutoff to obtain the right to the payment, regardless of whether the stock is sold days later. Those holding shares until this date will receive the dividend, even if they sell them before the actual payment.

4. Payment Date: When the capital is effectively credited to the accounts of qualified shareholders.

Main Factors That Affect Dividends

Various elements can impact the amounts or continuity of dividends:

Deterioration of results: When income projections are not realized, payments may be reduced or eliminated. Some companies resort to reserves to maintain dividends and avoid stock penalties.

Crisis situations: Significant litigation or other financial threats can lead to temporary suspensions.

Regulatory interventions: As occurred during the COVID-19 pandemic, governments may prohibit distributions in rescued companies.

Extraordinary income: Surpluses of profits or asset sales often generate extraordinary dividends.

Corporate operations: When a company is acquired through a takeover bid (OPA), pending dividends are often canceled.

Tax Treatment of Dividends

In Spain, dividends are subject to progressive taxation based on their annual amount:

• Up to €6,000 at a rate of 19%
• Between €6,000 and €50,000 at a rate of 21%
• Between €50,000 and €200,000 with an additional surcharge of 23%
• Over €200,000 at a rate of 26%

If the payment comes from investment funds, withholding is automatically applied. In the case of direct shares, it is the investor’s responsibility. When dividends are received in new shares, they are taxed only upon sale, based on the acquisition price of the original shares.

Practical Dividend Calculation

Determining the dividend per share (DPA) is relatively straightforward using the following formula:

DPA = Profits allocated for payment / Total outstanding shares

To analyze relative profitability, the Dividend Yield (RD) is used:

RD = (Dividend per share / Current share price) × 100

Application Example

Suppose “Banco Capital” generates profits of 12 million euros, allocating 75% to shareholder distribution, which amounts to 9 million. With 300 million shares outstanding:

DPA = 9,000,000 / 300,000,000 = €0.03

If the share trades at €2.00:

RD = (0.03 / 2.00) × 100 = 1.5%

Notable Companies in the 2023 Calendar

According to information available mid-year, corporations such as Abbott, Apple, Intel, JP Morgan, Mastercard, Microsoft, NVIDIA, Visa, and Walmart are among those scheduled for distributions. Spanish entities like Santander also maintain defined distribution calendars.

Numerous specialized platforms like Bloomberg and Reuters offer continuous updates on the dividend calendar, allowing investors to monitor changes in dates and expected amounts. This information is essential for optimizing investment strategies throughout the period.