Vengel Finance

If you’re new to investing in dividend-paying stocks, understanding the dividend timeline is absolutely essential. Many people hear “dividends” and get excited about the idea of getting paid just for holding a stock—but when you buy the stock really matters.

In this guide, we’ll walk you through the 5 key dividend dates in the dividend process, explained in very simple terms:

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1. Declaration Date – When the Dividend is Announced

This is the day the company’s board of directors says, “We’re giving out dividends!”

On the declaration date, the company:

• Confirms how much dividend will be paid (e.g., $1 per share).

• Sets the record date (we’ll explain that in a second).

• Tells investors when the dividend will actually be paid.

So, think of this as the official announcement that dividends are coming.

2. AGM Date – Shareholders Approve the Dividend

The Annual General Meeting (AGM) is when shareholders meet to:

• Approve the company’s financials

• Formally approve the dividend

If the dividend is not approved at the AGM, it will not be paid — even if it was previously proposed.

✅ So, in markets like Nigeria, dividend pay-outs are subject to AGM approval.

✅ Note: If you want voting rights or want to attend the AGM, you must be a shareholder before the qualification (record) date.

Take the first step to become a shareholder of any public company in Nigeria now!

3. Qualification Date (a.k.a. Record Date) – Who Is Eligible?

This is the cut-off date for who will get the dividend.

To qualify:

• Your name must appear in the company’s records as a shareholder on this date.

• The company checks its list (called the shareholder register) and seals it on the record date.

If you own the stock on or before this date, you qualify for the dividend.

4. The Ex-Dividend Date (Ex-Div) – The Most Important Date to Remember

The Ex-Dividend Date is usually one business day before the record date. This is the real deadline for buying the stock if you want the dividend.

✅ If you buy the stock before the Ex-Div date — you’ll receive the dividend.

❌ If you buy on or after the Ex-Div date — you won’t get the dividend, even if you hold the stock on the record date.

Why? Because it takes T+2 days (trade date + 2 business days) to settle a stock transaction.

So if you buy on the Ex-Div date, you’ll miss the settlement before the record date.

5. Price Mark-Down – Why the Stock Price Drops

On the Ex-Div date, you’ll often see the stock’s price drop by about the same amount as the dividend being paid.

This is called a technical price adjustment. It happens because:

• The value of the dividend is no longer part of the stock (since new buyers won’t get it).

• The stock exchange adjusts the price to reflect this.

So if a company is paying a $2 dividend, and the stock closed at $50 yesterday, it might open at $48 on the Ex-Div date.

This drop is not a loss — it’s just the market reflecting the cash going out to existing shareholders.

6. Payment Date – When You Get Paid

This is the day you finally receive your dividend — directly into your bank account.

It’s usually a few days or weeks after the record date. Companies will announce this date in advance as part of the dividend declaration.

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⚠️ Important Note:

Why the Stock Price May Rise Before Ex-Div

As the Ex-Div date gets closer, more investors try to buy the stock in time to qualify for dividends.

This increased demand often pushes the price up slightly before the Ex-Div date.

Smart investors use this knowledge to time their entries and exits.

Summary of the Dividend Timeline

Example of How the Dividend Timeline Works

Let’s say you’re eyeing a company called Dividend Kings Ltd., and they’ve just declared a dividend. Here’s how the timeline and strategy play out:

April 1, 2025 Dividend Kings Ltd. declares a ₦2 per share dividend.

They also announce:

Record or Qualification Date: April 12, 2025 and Payment Date: April 19, 2025

To qualify for the ₦2 dividend, you must be on the company’s record as a shareholder on or before April 12.

But here’s the trick…

The Ex-Dividend Date Explained

Date: April 11, 2025 (one business day before the record date)

To receive the dividend: You must buy the stock on or before April 10, so that it settles by April 12.

📌 If you buy on April 11 or later, you will NOT receive the dividend.

The Mark-Down Price Explained

Let’s say the Dividend Kings Ltd stock was trading at ₦50 on April 10.

On April 11 (Ex-Div date), the price is adjusted:

                   New price = ₦50 – ₦2 = ₦48

This ₦2 drop reflects the dividend being paid out. You’re not losing money—it’s just been moved from stock value into cash (your dividend).

Payment Date

Date: April 19, 2025 (in the case of our example here)

If you bought the stock before April 11, congratulations! You’ll receive ₦2 per share in your clearing account (the bank account you filled when you opened your CSCS account) on April 19.

So, if you own 1,000 shares, you’ll get: ₦2 × 1,000 = ₦2,000 in gross dividends.

Less 10% tax. You have N1,800 in net dividends.

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