Dividend is a profit payment from a company to you as a shareholder. This usually happens once a year, but it can also happen every half year or every quarter.
You have 2 types of dividend:
Cash dividend: you receive an amount of money in your investment account.
Stockdividend: you receive the value of the profit payment in shares.
Paying dividend is a way for companies to make their share (Dutch only) more attractive, which can increase the demand. And as you know, more demand usually leads to a higher price.
"}},{"componentType":"sectionTitle","title":"Why dividend shares?"},{"componentType":"paragraph","richBody":{"value":"If you have shares that pay dividend, then you can make a return in 2 ways:
Price return: when the price has gone up, the share has become more valuable and you are richer on paper.
Dividend: with cash dividend you receive the return in cash on your account, with stock dividend the payment is in shares.
Many companies do not pay dividend. In that case, your return only depends on the price of the share.
"}},{"componentType":"sectionTitle","title":"Good to know about dividend shares"},{"alignedImage":{"position":"right","extension":"svg","original":"https://assets.ing.com/m/6639cdfd929a15d5/original/Woman-cycling-losing-hat-scene-1.svg","transformBaseUrl":"https://assets.ing.com/transform/116adf76-d90d-4524-823b-27bc06a9de67/Woman-cycling-losing-hat-scene-1"},"componentType":"paragraph","richBody":{"value":"Keep the following in mind:
If you have ETF's (index investing (Dutch only)) or take part in an investment fund (Dutch only), you can also receive dividend. The amount depends on the payments of the companies that are inside the “basket”. In most cases, the dividend is reinvested automatically.
The amount of dividend per share is decided each year by a company.
A company can also decide to temporarily stop paying dividend, or to stop completely. This can happen, for example, if the company is not doing well for a period of time.
A share is proof that you take part in the capital of a company. More simply said: by buying a (dividend) share, you become a co‑owner of that company for a very small part.
"}},{"componentType":"sectionTitle","title":"Examples of dividend shares"},{"alignedImage":{"extension":"svg","original":"https://assets.ing.com/m/5951665945b6a35e/original/Cooking-is-as-investing-18.svg","transformBaseUrl":"https://assets.ing.com/transform/a0866c10-6a33-4f42-932c-d44a52115f62/Cooking-is-as-investing-18"},"componentType":"paragraph","richBody":{"value":"Some examples of well‑known Dutch companies that pay dividend are:
Shell
ING
Unilever
In the United States, for example:
Coca-Cola
McDonald's
Procter & Gamble
To know how much dividend you receive, you multiply the dividend per share by the number of shares you own.
Do you want to calculate the dividend return? Then you look at the current share price. You divide that by the dividend per share, and then you multiply it by 100%.
Suppose the dividend is set at €2.25 per share.
You have 100 shares.
You receive €225 in dividend (cash or in shares).
Het dividend is vastgesteld op € 2,25 per aandeel.
De koers van het aandeel is € 50.
Je hebt een dividendrendement van € 4,5%.
Everything has a first time. Whether you want to buy dividend shares on your own or choose one of the 4 ready-made funds (Dutch only) in which companies may pay dividend. But even for the more experienced investor, a short refresher can be useful.
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"}},{"icon":{"altTextNL":"\"\"","extension":"svg","original":"https://assets.ing.com/m/6716bef44a00873b/original/Transactions-Payment_Request_Euro_Outline.svg","transformBaseUrl":"https://assets.ing.com/transform/a7d6cbed-1598-4833-9544-de6d8e2f3a10/Transactions-Payment_Request_Euro_Outline","type":"image","width":32},"paragraphs":[{"componentType":"paragraph","richBody":{"value":"Easy Invest (Eenvoudig Beleggen)
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"}}],"componentType":"actionAccordion"},{"componentType":"sectionTitle","title":"What other (beginning) investors ask"},{"accordionList":[{"richBody":{"value":"We do not give you advice about which (dividend) share you should buy. Choose the companies whose shares you want to buy with care. Before you invest, take time to learn about the company and the market in which it operates.
"},"title":"Which dividend shares should I buy?"},{"richBody":{"value":"Because investing also costs money, we advise you to work towards €2,000 or more. This does not have to be in one go, but can also be done with, for example, €100 per month.
The costs depend on the chosen investment product. For example, you pay transaction costs for buying or selling shares, but not for buying or selling investment funds and index trackers. In addition, you pay a yearly basic fee and service fee. Are you younger than 30? Then you do not pay a basic fee!
"},"title":"How much money do I need to invest?"},{"richBody":{"value":"You must have bought a dividend share before the ex‑dividend date to receive the next dividend payment.
The ideal moment to start is impossible to know in advance. It is important to spread your investments. Both what (Dutch only) you invest in and when (Dutch only) you invest.
"},"title":"What is a good moment to buy dividend shares?"},{"richBody":{"value":"How much of the net profit goes to shareholders is called the pay‑out ratio. You calculate it by dividing the dividend per share by the net profit, and then multiplying it by 100%.
"},"title":"What is the pay-out ratio?"}],"componentType":"accordion"},{"componentType":"paragraph","richBody":{"value":"Investing involves risks and costs. You may lose (part of) your investment. Read more about the risks of investing and how you can reduce them.
*This translation is intended for the customer’s convenience only. In the event of any inconsistency between the English translation and the original Dutch version, the original Dutch version shall prevail.