MONEY MATTERS- Making Fortune From Dividend-Paying Stocks

Investing in dividend stocks may be considered as part of the goal to building long-term wealth.

Not every stock must pay dividend, but a steady, dependable dividend stream provides nice ballast to a portfolio’s return.

The chief operating officer of InvestData Consulting Limited, Mr Ambrose Omordion spoke with LEADERSHIP Weekend on how to invest in dividend paying stock.

Dividends are a type of payment used by companies to share profits with their shareholders. In the Nigeria capital market, dividends may be paid out on a quarterly, example SEPLAT Energy; semi-annual, twice a year; or annual basis, which is one way for investors to earn a return from their investments.

Dividends are payments made by companies to their shareholders based on the number of shares they own. Dividends are usually paid when a company has excess cash that is not being reinvested into the company. This excess cash is divided up among shareholders and paid out to them.

If a dividend is announced, qualified shareholders are notified through a press release, which usually includes the following: the declaration date, which is the date the dividend is declared; the record date, which is when companies review the list of shareholders to determine who is eligible to receive the upcoming dividend payment; and the payment date, which is the day shareholders will receive the dividend payment.