Loading the player...

What is 'Dividend Frequency'

Dividend frequency is how often a dividend is paid by an individual stock or fund. Dividend frequency can vary from monthly to annually. The managers of an investment will determine its dividend frequency, which can be based on numerous factors.

BREAKING DOWN 'Dividend Frequency'

Dividend frequency varies across investments and is determined by an investment’s management. Dividends, generally issued as cash payments or stock shares, are often paid monthly, quarterly, biannually or annually. Managers can also choose to pay a special dividend, which occurs outside of the regular dividend frequency.

Individual Securities

Stocks are the most common type of individual security that investors look to for dividends. Corporate managers often commit to target dividend payout rates and strive to achieve consistency once a dividend frequency has been established. Publicly traded stocks often choose to pay dividends quarterly in conjunction with earnings announcements, cash flow reports and forward projections. Real estate investment trusts (REITs) and master limited partnerships (MLPs) are two types of publicly traded corporations that are required to pay dividends, often leading to more frequent dividend payments.

Managed Funds

With managed funds, the fund’s managers choose the dividend frequency. Managed funds typically maintain a consistent dividend schedule, which is detailed in a fund’s prospectus. Managed funds have the advantage of paying investors dividends from income received by all of the investments in the fund. Managed fund cash flow management can often provide for more frequent dividends.

Dividend Yield

Dividend yield is a metric used when evaluating income investments. It is a measure of the income produced from an investment. A forward dividend yield calculation utilizes expected dividend frequency in its calculation, which provides investors with an estimate for the annual dividend. The forward dividend yield multiplies an investment’s most recent dividend by its expected annual dividend frequency and then divides by the investment’s price. The result is an estimated dividend yield reported as a percentage of the investment’s value.

Both stocks and managed funds may also pay special dividends that are provided outside of the standard dividend schedule. A special dividend would be included in an investment’s trailing 12-month dividend yield. However, it would not be included in a forward dividend yield calculation.

Dividend Investing

The Wheeler Real Estate Investment Trust is one of the highest traditional income paying investments in the U.S. market. The company is currently paying a quarterly dividend of $0.34. The REIT trades at approximately $7.65 with a forward dividend yield of 17.69%.

RELATED TERMS
  1. Cash Dividend

    Cash dividend is the money paid to stockholders normally as a ...
  2. Gross Dividends

    Gross dividends are the sum total of all dividends received, ...
  3. Stock Dividend

    A stock dividend, also known as a scrip dividend, is a dividend ...
  4. Dividend Aristocrat

    A dividend aristocrat is a company that has continuously increased ...
  5. Dividend Exclusion

    Dividend exclusion is a rule that allows corporations to subtract ...
  6. Incremental Dividend

    An incremental dividend is a series of regular increases to a ...
Related Articles
  1. Investing

    Is Dividend Investing a Good Strategy?

    Understanding dividends and how they generate steady income for shareholders will help you become a more informed and successful investor.
  2. Investing

    The Best 8 Funds For Regular Dividend Income

    Here's a list of the top mutual funds which pay regular dividends, for frequent income.
  3. Investing

    The Top 5 Dividend Paying Oil Stocks for 2016

    Discover the top five dividend-paying oil companies for 2016 and what factors contribute to their ability to continue dividend payments.
  4. Investing

    Dividend Yield For The Downturn

    High-dividend stocks make excellent bear market investments, but the payouts aren't a sure thing.
  5. Financial Advisor

    How mutual funds pay dividends: An overview

    The process by which mutual fund dividends are calculated, distributed and reported is fairly straightforward in most cases. Here's a look.
  6. Investing

    WMT: Wal-Mart Dividend Analysis

    Wal-Mart raised its dividend for the 43rd consecutive year, despite losing over 25% of its market value in 2015, and its dividend remains healthy in 2016.
  7. Investing

    Put Dividends to Work in Your Portfolio

    Find out how a company can put its profits directly into your hands.
  8. Investing

    Dividend ETFs Sought for Solid Revenue Streams

    Dividends can be found with plenty of ETFs, but investors should study up before committing capital.
RELATED FAQS
  1. Do I receive the posted dividend yield every quarter?

    Learn how companies with stock that pays dividends will typically distribute the dividend each quarter. Find out how much ... Read Answer >>
  2. What types of companies offer the most dividends?

    Find out which types of companies tend to offer the most dividends, and learn why dividends must be considered carefully ... Read Answer >>
Trading Center