Dividends are the profitable share of a joint stock company, which is paid to its shareholders, depending on how many securities they own. Naturally, their size in different people can vary significantly. Dividends on shares may be different, it all depends on the outcome fiscal year and company profile.
Where do these payments come from?
These funds come from the company's net earnings. Accordingly, dividends on shares are paid after the decision of the board of directors, and it is not always positive. If at the end of the reporting period the company incurred losses, then there will be nothing to rely on. But if we talk about Russian companies, especially with maximum capitalization, then in this case dividends on shares are paid relatively stably.
Investors are always interested in who will pay the most at the end of the fiscal year. In the domestic market, the largest dividends on shares of companies can be obtained from players in the oil and gas sector.
Payout Classification
Dividends on shares are divided into types according to different criteria. For example, depending on the frequency, they can be quarterly, semi-annual and annual, and by the method of payment are classified into cash or issued in the form of securities.
In the first case, the funds go to brokerage account a shareholder either on his bank card, or a person receives them in the form of a transfer. In the second case, we are talking about reinvestment, and this method is not practiced too often.
As for the third classification, there are dividend payments on ordinary shares and preferred. Naturally, their size to the market price will be higher in the second case, respectively, this investment acquisition will be much more profitable than the first.
At first, it may seem that ordinary shares are mainly acquired by ordinary citizens, but preferred shares are acquired by large financial players, who receive special rights, but this is far from the case. Each type has both pros and cons. Let's look at both in order.
What are common stocks?
Dividends in this case are paid depending on the current profit of the company. Holders of such shares also have the right to vote at general meetings. Payments on them can be canceled if the financial situation in the company deteriorates sharply. Most often, they receive dividends on shares of this type after the owners of preferred. Of course, this is risky, but everyone chooses for himself which option is most acceptable.
The amount of dividends on ordinary shares under domestic law may be from 75 percent or more of the amount of the established capital of the joint-stock company.
It is also worth adding that their cost is mainly higher than privileged, since large investors are mainly interested not in their own profit, but in participating in the management of the commercial structure. Basically, such investors are wealthy people anyway.
Features of preferred shares
Their holders differ in that they receive priority right to be the first to receive all payments. Moreover, their size can be established in a solid total dimension or in the order of its determination in the charter or as a percentage of the nominal value.If no clause is fulfilled, then holders of preferred shares receive their dividends on a common basis.
However, along with the fact that they provide holders with many special rights, managing their company with their help is not so simple. Some rights depend entirely on the structure, as well as the size of the payments.
What are preferred shareholders claiming?
Most often, the rights of holders are determined by the legislative framework and statutory documents of the shareholder company. This also applies to the maximum allowable share in the capital of preferred securities. In Russia them nominal cost cannot exceed the mark of 25 percent of the size of ownership of the structure.
As mentioned earlier, the owners of such shares receive dividends first, and if they were not paid to them, they receive a vote at the general meetings of the company legally. Most often, this is due to an increase in the value of securities that are in their ownership.
Among other things, it can be called interesting that the holders of preferred shares, in the absence of dividends, are not entitled to file a lawsuit with the courts.
Very often it is this type of investment that is chosen by private entities that want to profit from the growth of the financial market, but do not want to participate in the management of companies.
Dividends on shares: conditions
It should be added that there is the possibility of controlling payments at the legal level. If a company has problems in preparing accounting documents or is involved in litigation, its investors risk not getting their profit.
The size of dividends on shares, regardless of their type, tend to decrease in relation to the profit of the structure in price due to its taxation. Most often, cost reduction occurs at almost the same level in both cases.
When can you expect your dividends?
So, if a private entrepreneur has acquired shares in any company, how much time will it take for him to get the expected profit?
In order to receive dividends on shares of Gazprom or a smaller company, you should know the date when the register closes, that is, a list of persons who apply for these payments. To get into it, you need to have in your possession securities on this date in any quantity.
The amount of dividends on shares is determined by the board of directors of the company, and the meeting of shareholders cannot in any way revise it in the future upward. Moreover, it is carried out in weeks or even months after the closure of the registry. After the meeting, a certain period of time must pass, during which the funds from the company account will be transferred first to settlement brokerage accounts, and then to client accounts.
According to the Federal Law on Joint-Stock Companies, the maximum period from the moment of payment to the payment should be a maximum of 60 days. The period may be shorter if it involves the articles of association of the company or shareholders so decided in the framework of the meeting. Dividends on shares of the largest Russian companies come to accounts most often in the second half of the summer.
Where is it more profitable to invest?
Naturally, many wish to receive dividends on Gazprom shares. They are the most desirable among traders. The company has maintained financial stability for many years in a row, which attracts a huge number of investors. And such constancy ensures that you can make very good money by investing in this structure. So, what guarantees the prospects of the country's largest gas corporation? First of all, the controlling stake of more than 50 percent belongs to the Federal Agency for State Property Management. Also, the lion's share of assets is in the hands of major structures and investors.
Opening an account for the sale of Gazprom securities
A trader can purchase shares of this company through a brokerage company according to stock prices. To do this, he is obliged to conclude an agreement with her, after which an account is opened in his name.
This can be done through a contract with the Investment Chamber, whose offices are present in most regions of the country. Call her representative and agree on the time of your visit, do not forget your passport. To prepare all the necessary documents for concluding a contract, less than half an hour will be enough. When signing it, the client receives his sample of securities, as well as a number and password for connecting to the exchange website.
You can also register an account by submitting an application in electronic form. To do this, go to the website of the Investment Chamber and fill out the form in the prescribed form. Send it to managers, then they will contact you by phone indicated in it and agree on the conclusion of a brokerage agreement. Further, all points are similar to the previous option, in addition, the client also has the opportunity to connect his account to a brokerage terminal.
At the conclusion of the contract, the trader, if desired, can receive a practical training manual for the initial work. Also, if you want to become a full-fledged participant in this market, it is recommended to take specialized courses and periodically improve your knowledge.
Gazprom stock purchase
Transfer a certain amount of funds to a brokerage account, after which you can proceed to exchange trading. There are no special restrictions on the purchase of securities, therefore, to buy shares, it is enough to have the funds to at least purchase one. There is no maximum threshold.
When an account is opened in the name of the client, he is obliged to pay for the maintenance and execution of certain operations. The amount in this case depends on how much the trader has. For example, with a turnover of about 20 thousand rubles a year, the cost of service will be 100 rubles within the most reasonable tariff. Payment is not charged if no operations have been conducted and there have been no movements on the client’s account. It is recommended to choose a service tariff that corresponds to the amount of money invested and the number of transactions. Thus, the amount of dividends on shares will not only cover your expenses, but will also bring significant profit. The price of one security as of 2015 is 7.2 rubles. Now it is forecasted to increase to 9.8 rubles, respectively.
Securities of Sberbank: what to expect?
Russia's largest financial structure last year significantly reduced dividend payments for 2014. The minority shareholders of the company were very disappointed, because even much less significant banks, whose situation was very difficult during the crisis, allocated much more money to their investors. And this year, their cost ranges from 2.08 to 2.59 rubles, as you can see, so far it has not been possible to count on anything large.
Naturally, many are now wondering what the dividends on Sberbank shares for the previous year will be, and whether they should be expected at all. Not so long ago, the company's financial director held a press conference and assured minority shareholders that about twenty percent of net profit under IFRS will be directed to this expense item. Accordingly, Sberbank will return to the previously practiced payment scheme. But what happened was an unpopular, but extremely necessary event, which contributed to maintaining the structure’s capital at a decent level.
Prospects for Sberbank and other financial institutions
The company's management is confident that the return on ordinary and preferred shares will be from 3.8 to 6.2 percent in the near future, despite the fact that this sector will still be problematic in the coming years.However, Sberbank will be less sensitive to various crises, and the point is not only in its high status, but also in effective corporate governance and cheap funding.
Many structures of this kind survived powerful blows in 2014 and are now actively fighting the decline in the quality of their assets. It is expected that in the near future Sberbank will fully restore its previous positions.
Indulgence despite instability
Despite the crisis, another large financial organization in Russia - VTB - not only did not refuse to pay dividends to its shareholders and kept them at the same level, but, on the contrary, increased them. This turned out to be very attractive for bank investors, especially foreign ones. As you know, private interests from Qatar, Azerbaijan and Norway own its shares.
It is worth noting that this year VTB will pay dividends on preferred shares for the first time, especially since the state is its sole owner. The size of these deductions will be minimal. In this way, the authorities want to show that the interests of private investors, and not state ones, are put first.
Naturally, investing in large structures such as Sberbank or Gazprom is best because they are stable and can provide good returns. But it’s better to always look at the financial press before a deal for the state of affairs in a company and find out what dividends they offer.
