Ex Dividend Definition: How the Ex-Dividend Date Works
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Key terms
- DividendA portion of a company's earnings distributed to shareholders, typically paid quarterly. Dividends provide a steady income stream in addition to potential stock price appreciation.
- Dividend YieldAnnual dividend payment divided by the stock price, expressed as a percentage. A 5% dividend yield means the stock pays $5 annually for every $100 invested.
- Dividend AristocratAn S&P 500 company that has increased its dividend for at least 25 consecutive years. Indicates financial stability and commitment to shareholders. Examples include Coca-Cola and Johnson & Johnson.
- Due DateThe date by which the minimum payment must be received to avoid late fees and maintain grace period. Typically 21-25 days after statement closing date, as required by law.
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