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When you buy shares in a company, you become one of its shareholders. Some companies choose to share part of their profits with shareholders. This is called a dividend.
Dividends can be:
- Cash (money paid to shareholders)
- Stocks – free shares added to your account)
Dividend Terms to Know
Announcement Date: The company confirms it will distribute a dividend and announces the key dates.
Ex-Dividend Date: The date the stock starts trading without the right to the upcoming dividend. If you buy on or after the ex-dividend date, you won’t receive that dividend.
Record Date: The date the company checks its shareholder records to confirm who’s eligible.
Payment Date: The date the company starts distributing the dividend.
Eligibility Timeline
Because ADX follows a T+2 settlement cycle, buying “in time” usually means buying before the ex-dividend date so your purchase can settle and be recorded properly.
Cash Dividends
Cash dividends are direct cash payments a company gives to its shareholders. The company pays a specific amount per share you own.
Example: if a company pays AED 0.50 per share and you own 100 shares, you receive AED 50.
If you’re eligible, you’ll receive an email with:
- your owned quantity as of the Ex-Dividend Date
- your estimated dividend amount (DPS × shares)
*Dividends on ADX are processed directly through ADX.
Your dividends are credited to the bank account (IBAN) you registered when opening your account within 5 working days from the dividend payout date.
Payout timing: Dividends are typically paid within 3–4 weeks from the eligibility (record) date, depending on the company.
Stock Dividends
Stock dividends are free shares the company gives to existing shareholders.
- Instead of cash, you receive additional shares.
- Stock dividends are added automatically to your account once processed.
- No action is needed from your side.
- You’ll see the new shares reflected in your portfolio once the distribution is finalized.
Taxes
Any applicable deductions (if any) are handled as part of the distribution process before the dividend is credited.
