in this video i'm going to take a look at dividends and what are dividends and just sort
of an overview or an essentials somebody asked me there made a comment and they're looking for
some information about dividends dividends are a distribution of a portion of a company's profits
they're paid out to shareholders they can be paid in cash or they can be paid by granting of further
shares some companies will pay two dividends a year an interim dividend and a final dividend
well-established stalwart companies like for example smurfette's smartphone kappa group c
or h bank of ireland those type of companies will pay two dividends per year
an x uh an interim dividend and a final dividend so if we just take a look there at for example
c r h smed roadstone holdings plc in 2019 to put out an interim dividend of 20 cents per share
and a final dividend of 63 pence per share now there's three dates that you need to be aware
of when it comes to dividends three important dates they are the ex-dividend days the dividend
payment date and the record date and let me just explain exactly what it is smallford kappa
group plc declared an ex-dividend date of the 8th of april 2021 this year
they declared a record date about the 9th of april 2021 so if you are a shareholder
on the 9th of april 2021 you are entitled to the dividend that are going to pay out um on
the 7th of may 2021 so there's three dates there there's the ex dividend date in other words
up to that point it's irrelevant in terms of you being a shareholder or not the relevant date in
terms of being a shareholder is the record date of the 9th of april if you're a shareholder on the
record date of 9th of april 2021 then the payment date 7th of may 2021 you'll receive a dividend
payment in respect to that if you're a shareholder on that record date as i say there's two
payments made per annum generally an interim dividend and a final dividend and
the interim dividend tends to be smaller payment and the final dividend is paid out at the end of
the fiscal or financial year obviously when you're choosing shares to invest in some shares depending
on your age depending on your circumstances perhaps you're retired and you're looking for safe
shares with a regular record of paying dividends and so on in that situation you might be looking
at the likes of c or h or smurfettes or some of those big industrials that kind of have a good
long history of paying dividends c or h for example have paid dividends every year
for 50 years so if you're a retired person and you're looking at a safe steady sort of a share
that's thrown off regular dividend income and dividend income is important to you well then
obviously the likes of c or h will be of interest to you on the other hand you have companies who
don't pay out dividends at all so you might have a twitter or a snapchat or a nearly startup company
a significant yearly growth company but won't be paying dividends for anytime soon because it's not
making profits it's simply generating growth it's trying to grow it's trying to generate revenue
advertising revenue trying to get new subscribers to the various channels or platforms or whatever
it's trying to do so that type of company is not going to be paying out dividends so
if you are older person more mature you want something safe and steady then obviously you're
not going to be looking at the likes of twitter or snapchat or facebook well leaving aside facebook
and a nearly growth sort of a rocket ship company to be paying out steady dividends but you would be
smart in building a portfolio or creating a portfolio that has a federal
balance between strong growth or high growth and slow growth fast growth and slow growth and
dividend payment and non-dividend payments and so on now one of the best or most successful
investors of all time warren buffett of berkshire hathaway has never paid out dividends and he has
a philosophy that the earnings and the profits etc are retained and reinvested in the business
to grow even more profits rather than paying off dividends to shareholders and he takes the
view that if shareholders need cash then they can simply sell some shares there is evidence as well
from nobel laureate economists to the effect that dividends are irrelevant the more important
areas that you should be concerned about would be cash flow and hearings in a company and certainly
earnings in any company is the significant driver in my view of the share price and obviously the
ultimate success and longevity of a company anyway that is the situation in relation to dividends
so you're basically looking at a distribution of a certain portion of a company's profits they must
make profits and they must then declare dividend to pay it twice a year perhaps an interim dividend
and a final dividend uh there's a couple of days two or three dates there that you need to be
concerned about the ex-dividend date the dividend payment date and the record date hope you find
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