Russell Gold's  Instablog

When investing in dividend stocks, there are a few important dates to keep in mind. These meaningful dates tell an investor when he or she collects the dividends and or if they are even eligible to collect the most recent dividend.

What does the Ex-Dividend date mean?

The Ex-Dividend date is the most important date in dividend investing. Ex-Dividend is the day on which all shares purchased and sold no longer come with deserved-to-be-paid the most recently declared dividend. It is just as important for investors, however, since you must own a stock before the ex-dividend date in order to receive the next scheduled dividend.

Prior to ex-dividend date, the stock is said to be cum dividend "with dividend," and remaining share holders of the stock and anyone who buys it will receive the dividend, whereas any holders selling the stock lose their right to the dividend. On and after this date the stock becomes ex dividend "without dividend," and remaining share holders of the stock will receive the dividend even if they now sell the stock, whereas anyone who now buys the stock will no longer receive the dividend.

What does the record date mean?

Record date is automatic for shares purchased before the ex-dividend date.

What is the payment date?

The payment date or "payout date" is the day when the dividends will actually be delivered to the shareholders of a company and credited to brokerage accounts.

What is the declaration date?

The declaration date or "announcement date" is the day on which a company's board of directors announces its next dividend payment.

For instance, Kinder Morgan KMI Board of Directors officially declared a $0.35 dividend per share on July 18, 2012. The dividend is payable on August 15, 2012, to stockholders of record as of the close of business on July 31, 2012. The ex-dividend date is July 27, 2012. Kinder Morgan has paid dividends since 1937.

Below is a list of stock types (common shares, preferred shares, ETFs, ETNs ADRs) and bonds reporting an ex-dividend date July 27, 2012.

Note: It is common for a stock's underlying price to decrease on the ex-dividend date by an amount approximately equal to the dividend. This reflects the decrease in the company's assets resulting from the declaration of the dividend.