How Come I Didn't Get My Dividend?

Focus: DIVIDEND

John Heinzl Image John Heinzl Reporter and Columnist, GlobeInvestor.com

Payments are based around four key dates, two of which can seem a little complicated, so John Heinzl of Globe Investor is here to explain what dividend investors need to know if they want to capture payouts effectively.

On September 7, I bought 100 shares of Telus (Toronto: T), fully expecting that I would receive the 61-cent dividend payable on October 1. However, when I checked my statement I did not receive the dividend. What gives?

The bad news is that you aren't going to receive that dividend, because you aren't entitled to it. The good news is that you can avoid this sort of frustration in the future by understanding four key dividend dates—the dividend declaration date, ex-dividend date, record date, and payable date.

We'll use the Telus dividend as an example and explain what each of these terms means. First, August 3 was the declaration date. This was the date the company announced the dividend. Nothing complicated about that.

The pay date of October 1 is also straightforward. This is the date the company actually pays the money to shareholders. (In my own experience, the dividend usually lands in my discount brokerage account one business day after the pay date.)

The ex-date and record are a bit more complicated, which is probably why you got tripped up. When a company declares a dividend, it doesn't just start writing checks immediately. Instead, it sets a date in the future called the record date, which it uses to determine which shareholders are entitled to receive the dividend.

It's called a record date because you have to be a shareholder of record—that is, on the company's books—as of that date in order to get the dividend.