Are dividends exclusively a part of earnings?Can a company stop paying dividends?Do companies only pay dividends if they are in profit?What are dividends, when are they paid, and how do they affect my position?Companies that use their cash to buy back stock, issue dividends, etc. — how does this this typically affect share price?Where to find site with earnings calendar?What makes a Company's Stock prices go up or down?Are dividends the only thing linking stocks to corporate performance?What are the tax benefits of dividends vs selling stockIndex funds with dividends?Taxes on foreign and local dividends held in a TFSAAre stock buybacks similar to dividends?
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Are dividends exclusively a part of earnings?
Can a company stop paying dividends?Do companies only pay dividends if they are in profit?What are dividends, when are they paid, and how do they affect my position?Companies that use their cash to buy back stock, issue dividends, etc. — how does this this typically affect share price?Where to find site with earnings calendar?What makes a Company's Stock prices go up or down?Are dividends the only thing linking stocks to corporate performance?What are the tax benefits of dividends vs selling stockIndex funds with dividends?Taxes on foreign and local dividends held in a TFSAAre stock buybacks similar to dividends?
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Are stock dividends exclusively part of earnings? Or are there cases when companies pay dividends despite zero or low earnings?
stocks
edited Jul 16 at 16:43
Brythan
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asked Jul 15 at 6:53
user1user1
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add a comment
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Are stock dividends exclusively part of earnings? Or are there cases when companies pay dividends despite zero or low earnings?
stocks
edited Jul 16 at 16:43
Brythan
20.3k6 gold badges48 silver badges65 bronze badges
asked Jul 15 at 6:53
user1user1
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The laws on what money can be used to pay dividends vary from country to country. What country do you want to know about?
– Mike Scott
Jul 15 at 20:22
The term you are looking for is "Capital Dividend" and arguably it is not a dividend at all.
– Ben Voigt
Jul 16 at 5:49
@MikeScott I see, it is the general picture I was after
– user1
Jul 16 at 7:57
Dupe money.stackexchange.com/questions/52119/… and related money.stackexchange.com/questions/64237/…
– dave_thompson_085
Jul 17 at 23:27
add a comment
|
Are stock dividends exclusively part of earnings? Or are there cases when companies pay dividends despite zero or low earnings?
stocks
edited Jul 16 at 16:43
Brythan
20.3k6 gold badges48 silver badges65 bronze badges
asked Jul 15 at 6:53
user1user1
5301 gold badge5 silver badges12 bronze badges
Are stock dividends exclusively part of earnings? Or are there cases when companies pay dividends despite zero or low earnings?
stocks
stocks
edited Jul 16 at 16:43
Brythan
20.3k6 gold badges48 silver badges65 bronze badges
asked Jul 15 at 6:53
user1user1
5301 gold badge5 silver badges12 bronze badges
edited Jul 16 at 16:43
Brythan
20.3k6 gold badges48 silver badges65 bronze badges
asked Jul 15 at 6:53
user1user1
5301 gold badge5 silver badges12 bronze badges
edited Jul 16 at 16:43
Brythan
20.3k6 gold badges48 silver badges65 bronze badges
edited Jul 16 at 16:43
Brythan
20.3k6 gold badges48 silver badges65 bronze badges
edited Jul 16 at 16:43
Brythan
20.3k6 gold badges48 silver badges65 bronze badges
20.3k6 gold badges48 silver badges65 bronze badges
asked Jul 15 at 6:53
user1user1
5301 gold badge5 silver badges12 bronze badges
asked Jul 15 at 6:53
user1user1
5301 gold badge5 silver badges12 bronze badges
asked Jul 15 at 6:53
user1user1
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5301 gold badge5 silver badges12 bronze badges
The laws on what money can be used to pay dividends vary from country to country. What country do you want to know about?
– Mike Scott
Jul 15 at 20:22
The term you are looking for is "Capital Dividend" and arguably it is not a dividend at all.
– Ben Voigt
Jul 16 at 5:49
@MikeScott I see, it is the general picture I was after
– user1
Jul 16 at 7:57
Dupe money.stackexchange.com/questions/52119/… and related money.stackexchange.com/questions/64237/…
– dave_thompson_085
Jul 17 at 23:27
add a comment
|
The laws on what money can be used to pay dividends vary from country to country. What country do you want to know about?
– Mike Scott
Jul 15 at 20:22
The term you are looking for is "Capital Dividend" and arguably it is not a dividend at all.
– Ben Voigt
Jul 16 at 5:49
@MikeScott I see, it is the general picture I was after
– user1
Jul 16 at 7:57
Dupe money.stackexchange.com/questions/52119/… and related money.stackexchange.com/questions/64237/…
– dave_thompson_085
Jul 17 at 23:27
The laws on what money can be used to pay dividends vary from country to country. What country do you want to know about?
– Mike Scott
Jul 15 at 20:22
The laws on what money can be used to pay dividends vary from country to country. What country do you want to know about?
– Mike Scott
Jul 15 at 20:22
The term you are looking for is "Capital Dividend" and arguably it is not a dividend at all.
– Ben Voigt
Jul 16 at 5:49
The term you are looking for is "Capital Dividend" and arguably it is not a dividend at all.
– Ben Voigt
Jul 16 at 5:49
@MikeScott I see, it is the general picture I was after
– user1
Jul 16 at 7:57
@MikeScott I see, it is the general picture I was after
– user1
Jul 16 at 7:57
Dupe money.stackexchange.com/questions/52119/… and related money.stackexchange.com/questions/64237/…
– dave_thompson_085
Jul 17 at 23:27
Dupe money.stackexchange.com/questions/52119/… and related money.stackexchange.com/questions/64237/…
– dave_thompson_085
Jul 17 at 23:27
add a comment
|
3 Answers
3
active
oldest
votes
In the end it comes out of earnings, but the earnings don't have to be made that financial year. So yes you can pay dividends despite negative, zero or low earnings in a specific year. This can be a strategic consideration of the company called dividend continuity.
This is based on German Law (§ 150 AktG), but should be applicable elsewhere as well.
edited Jul 16 at 12:46
Glorfindel
5431 gold badge5 silver badges14 bronze badges
answered Jul 15 at 7:37
Thomas Thomas
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add a comment
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Cash dividends are paid from the company's cash on hand. It doesn't matter where that money comes from. You might have earned it that year, previous years, or (rarely and foolishly) borrowed it or retained it from a stock offering, etc.
A cash dividend is funds or money paid to stockholders generally as part of the corporation's current earnings or accumulated profits.
answered Jul 15 at 8:52
RonJohnRonJohn
25.7k7 gold badges49 silver badges96 bronze badges
7
One quibble - jurisdictional corporate law will often prevent dividends from being paid out of debt / equity offerings. Similar cash payments may be made, but they are likely called something else ['repatriation of capital', or similar].
– Grade 'Eh' Bacon
Jul 15 at 12:44
1
"rarely and foolishly" - That seems overly subjective. Corporations in US have been engaging in debt-funded buybacks and dividend recaps for many years since 09. Whether or not that's foolish depends on whose perspective you're taking.
– xiaomy
Jul 16 at 19:00
add a comment
|
Dividends are actually paid from Retained earnings via Cash so the process is a step or two removed from direct earnings. This helps to explain how companies can pay a dividend despite “zero or low earnings” or even negative earnings (although this is probably not clever).
Simply, a company can pay a dividend providing it has the cash to pay it.
The decision is up to the board of directors and any number of factors may enter into their reasoning.
answered Oct 25 at 22:51
LynMLynM
813 bronze badges
add a comment
|
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3 Answers
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active
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votes
3 Answers
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active
oldest
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oldest
votes
In the end it comes out of earnings, but the earnings don't have to be made that financial year. So yes you can pay dividends despite negative, zero or low earnings in a specific year. This can be a strategic consideration of the company called dividend continuity.
This is based on German Law (§ 150 AktG), but should be applicable elsewhere as well.
edited Jul 16 at 12:46
Glorfindel
5431 gold badge5 silver badges14 bronze badges
answered Jul 15 at 7:37
Thomas Thomas
4252 silver badges5 bronze badges
add a comment
|
In the end it comes out of earnings, but the earnings don't have to be made that financial year. So yes you can pay dividends despite negative, zero or low earnings in a specific year. This can be a strategic consideration of the company called dividend continuity.
This is based on German Law (§ 150 AktG), but should be applicable elsewhere as well.
edited Jul 16 at 12:46
Glorfindel
5431 gold badge5 silver badges14 bronze badges
answered Jul 15 at 7:37
Thomas Thomas
4252 silver badges5 bronze badges
add a comment
|
In the end it comes out of earnings, but the earnings don't have to be made that financial year. So yes you can pay dividends despite negative, zero or low earnings in a specific year. This can be a strategic consideration of the company called dividend continuity.
This is based on German Law (§ 150 AktG), but should be applicable elsewhere as well.
edited Jul 16 at 12:46
Glorfindel
5431 gold badge5 silver badges14 bronze badges
answered Jul 15 at 7:37
Thomas Thomas
4252 silver badges5 bronze badges
In the end it comes out of earnings, but the earnings don't have to be made that financial year. So yes you can pay dividends despite negative, zero or low earnings in a specific year. This can be a strategic consideration of the company called dividend continuity.
This is based on German Law (§ 150 AktG), but should be applicable elsewhere as well.
edited Jul 16 at 12:46
Glorfindel
5431 gold badge5 silver badges14 bronze badges
answered Jul 15 at 7:37
Thomas Thomas
4252 silver badges5 bronze badges
edited Jul 16 at 12:46
Glorfindel
5431 gold badge5 silver badges14 bronze badges
edited Jul 16 at 12:46
Glorfindel
5431 gold badge5 silver badges14 bronze badges
edited Jul 16 at 12:46
Glorfindel
5431 gold badge5 silver badges14 bronze badges
5431 gold badge5 silver badges14 bronze badges
answered Jul 15 at 7:37
Thomas Thomas
4252 silver badges5 bronze badges
answered Jul 15 at 7:37
Thomas Thomas
4252 silver badges5 bronze badges
answered Jul 15 at 7:37
Thomas Thomas
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4252 silver badges5 bronze badges
add a comment
|
add a comment
|
Cash dividends are paid from the company's cash on hand. It doesn't matter where that money comes from. You might have earned it that year, previous years, or (rarely and foolishly) borrowed it or retained it from a stock offering, etc.
A cash dividend is funds or money paid to stockholders generally as part of the corporation's current earnings or accumulated profits.
answered Jul 15 at 8:52
RonJohnRonJohn
25.7k7 gold badges49 silver badges96 bronze badges
7
One quibble - jurisdictional corporate law will often prevent dividends from being paid out of debt / equity offerings. Similar cash payments may be made, but they are likely called something else ['repatriation of capital', or similar].
– Grade 'Eh' Bacon
Jul 15 at 12:44
1
"rarely and foolishly" - That seems overly subjective. Corporations in US have been engaging in debt-funded buybacks and dividend recaps for many years since 09. Whether or not that's foolish depends on whose perspective you're taking.
– xiaomy
Jul 16 at 19:00
add a comment
|
Cash dividends are paid from the company's cash on hand. It doesn't matter where that money comes from. You might have earned it that year, previous years, or (rarely and foolishly) borrowed it or retained it from a stock offering, etc.
A cash dividend is funds or money paid to stockholders generally as part of the corporation's current earnings or accumulated profits.
answered Jul 15 at 8:52
RonJohnRonJohn
25.7k7 gold badges49 silver badges96 bronze badges
7
One quibble - jurisdictional corporate law will often prevent dividends from being paid out of debt / equity offerings. Similar cash payments may be made, but they are likely called something else ['repatriation of capital', or similar].
– Grade 'Eh' Bacon
Jul 15 at 12:44
1
"rarely and foolishly" - That seems overly subjective. Corporations in US have been engaging in debt-funded buybacks and dividend recaps for many years since 09. Whether or not that's foolish depends on whose perspective you're taking.
– xiaomy
Jul 16 at 19:00
add a comment
|
Cash dividends are paid from the company's cash on hand. It doesn't matter where that money comes from. You might have earned it that year, previous years, or (rarely and foolishly) borrowed it or retained it from a stock offering, etc.
A cash dividend is funds or money paid to stockholders generally as part of the corporation's current earnings or accumulated profits.
answered Jul 15 at 8:52
RonJohnRonJohn
25.7k7 gold badges49 silver badges96 bronze badges
Cash dividends are paid from the company's cash on hand. It doesn't matter where that money comes from. You might have earned it that year, previous years, or (rarely and foolishly) borrowed it or retained it from a stock offering, etc.
A cash dividend is funds or money paid to stockholders generally as part of the corporation's current earnings or accumulated profits.
answered Jul 15 at 8:52
RonJohnRonJohn
25.7k7 gold badges49 silver badges96 bronze badges
answered Jul 15 at 8:52
RonJohnRonJohn
25.7k7 gold badges49 silver badges96 bronze badges
answered Jul 15 at 8:52
RonJohnRonJohn
25.7k7 gold badges49 silver badges96 bronze badges
answered Jul 15 at 8:52
RonJohnRonJohn
25.7k7 gold badges49 silver badges96 bronze badges
25.7k7 gold badges49 silver badges96 bronze badges
7
One quibble - jurisdictional corporate law will often prevent dividends from being paid out of debt / equity offerings. Similar cash payments may be made, but they are likely called something else ['repatriation of capital', or similar].
– Grade 'Eh' Bacon
Jul 15 at 12:44
1
"rarely and foolishly" - That seems overly subjective. Corporations in US have been engaging in debt-funded buybacks and dividend recaps for many years since 09. Whether or not that's foolish depends on whose perspective you're taking.
– xiaomy
Jul 16 at 19:00
add a comment
|
7
One quibble - jurisdictional corporate law will often prevent dividends from being paid out of debt / equity offerings. Similar cash payments may be made, but they are likely called something else ['repatriation of capital', or similar].
– Grade 'Eh' Bacon
Jul 15 at 12:44
1
"rarely and foolishly" - That seems overly subjective. Corporations in US have been engaging in debt-funded buybacks and dividend recaps for many years since 09. Whether or not that's foolish depends on whose perspective you're taking.
– xiaomy
Jul 16 at 19:00
7
7
One quibble - jurisdictional corporate law will often prevent dividends from being paid out of debt / equity offerings. Similar cash payments may be made, but they are likely called something else ['repatriation of capital', or similar].
– Grade 'Eh' Bacon
Jul 15 at 12:44
One quibble - jurisdictional corporate law will often prevent dividends from being paid out of debt / equity offerings. Similar cash payments may be made, but they are likely called something else ['repatriation of capital', or similar].
– Grade 'Eh' Bacon
Jul 15 at 12:44
1
1
"rarely and foolishly" - That seems overly subjective. Corporations in US have been engaging in debt-funded buybacks and dividend recaps for many years since 09. Whether or not that's foolish depends on whose perspective you're taking.
– xiaomy
Jul 16 at 19:00
"rarely and foolishly" - That seems overly subjective. Corporations in US have been engaging in debt-funded buybacks and dividend recaps for many years since 09. Whether or not that's foolish depends on whose perspective you're taking.
– xiaomy
Jul 16 at 19:00
add a comment
|
Dividends are actually paid from Retained earnings via Cash so the process is a step or two removed from direct earnings. This helps to explain how companies can pay a dividend despite “zero or low earnings” or even negative earnings (although this is probably not clever).
Simply, a company can pay a dividend providing it has the cash to pay it.
The decision is up to the board of directors and any number of factors may enter into their reasoning.
answered Oct 25 at 22:51
LynMLynM
813 bronze badges
add a comment
|
Dividends are actually paid from Retained earnings via Cash so the process is a step or two removed from direct earnings. This helps to explain how companies can pay a dividend despite “zero or low earnings” or even negative earnings (although this is probably not clever).
Simply, a company can pay a dividend providing it has the cash to pay it.
The decision is up to the board of directors and any number of factors may enter into their reasoning.
answered Oct 25 at 22:51
LynMLynM
813 bronze badges
add a comment
|
Dividends are actually paid from Retained earnings via Cash so the process is a step or two removed from direct earnings. This helps to explain how companies can pay a dividend despite “zero or low earnings” or even negative earnings (although this is probably not clever).
Simply, a company can pay a dividend providing it has the cash to pay it.
The decision is up to the board of directors and any number of factors may enter into their reasoning.
answered Oct 25 at 22:51
LynMLynM
813 bronze badges
Dividends are actually paid from Retained earnings via Cash so the process is a step or two removed from direct earnings. This helps to explain how companies can pay a dividend despite “zero or low earnings” or even negative earnings (although this is probably not clever).
Simply, a company can pay a dividend providing it has the cash to pay it.
The decision is up to the board of directors and any number of factors may enter into their reasoning.
answered Oct 25 at 22:51
LynMLynM
813 bronze badges
answered Oct 25 at 22:51
LynMLynM
813 bronze badges
answered Oct 25 at 22:51
LynMLynM
813 bronze badges
answered Oct 25 at 22:51
LynMLynM
813 bronze badges
813 bronze badges
add a comment
|
add a comment
|
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The laws on what money can be used to pay dividends vary from country to country. What country do you want to know about?
– Mike Scott
Jul 15 at 20:22
The term you are looking for is "Capital Dividend" and arguably it is not a dividend at all.
– Ben Voigt
Jul 16 at 5:49
@MikeScott I see, it is the general picture I was after
– user1
Jul 16 at 7:57
Dupe money.stackexchange.com/questions/52119/… and related money.stackexchange.com/questions/64237/…
– dave_thompson_085
Jul 17 at 23:27