Throughout the site, there are quite a few abbreviations and terms that that might be confusing. Here are some but if you think we're missing any, please send us a note and let us know.
American depositary receipt (ADR, and sometimes spelled depository) is a negotiable security that represents securities of a company that trades in the U.S. financial markets.
Consecutive Annual Dividend Increases; this is the number of years historically that this company has been increasing its dividend on an annual basis. The most reliable dividend payers will continue to increase their payments year after year, even in a recession.
Exchange-traded fund - An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks An ETF holds assets such as stocks, commodities, or bonds and generally operates with an arbitrage mechanism designed to keep it trading close to its net asset value, although deviations can occasionally occur. Most ETFs track an index, such as a stock index or bond index. ETFs may be attractive as investments because of their low costs, tax efficiency, and stock-like features.
The ex-dividend date, or ex-date for short, is one of four stages that companies go through when they pay dividends to their shareholders. The ex-dividend date is important because it determines whether the buyer of a stock will be entitled to receive its upcoming dividend.
Forecast Dividend Increase; this is the percentage we are expecting the annual dividend to increase by next year. If this is negative it means we are forecasting a cut.
When a dividend is declared, shareholders are notified via press release and the information is usually reported through major stock quoting services for easy reference. The key dates that an investor should look for are:
The date that the dividend is declared called the declaration date.
At the time of the dividend declaration the ex-date or date the stock begins trading ex-dividend is announced. Buying a share on or after its ex-date means you are not entitled to receive the dividend payment.
To be entitled to receive a dividend you must hold the share before the ex-date. This is called being cum-dividend.
In most of the world (e.g. in the UK and US) the business day following the ex-date is called the record date, or date of record. This is the date that all shareholders on record are entitled to the dividend payment. The delay between ex-date and record date is because the shareholder register needs to be assembled and distributed to ensure the correct dividend payouts.
The payment date follows usually between a few days and 2 months after the record date and represents the date the dividend cheques are sent and deposits made in shareholder accounts.