How to Capture Dividends Stocks

Dividend is a reward that the shareholders earn after holding a commodity for a certain period of time. Capturing a dividend means trading the stock at just the right time to get the maximum amount of profit from the stock. Mostly dividends are paid out in cash but occasionally they are also paid in the form of shares.

Learning to capture dividends is not an easy task as it involves buying of shares and holding them just long enough to earn dividends on them. Generally dividend paying stocks make only 4 distributions in a calendar year.


  • 1

    Do research on different type of dividend generating stocks. Make lists of stocks based on different set of parameters, for example make one list with profit margin as the base, while in the other one set risk as your main parameter.

  • 2

    Some of these stocks will be in the January, April, July, October cycle, while some will pay out in the February, May, August cycle, where as the third tier of stocks will work through March, June, September and December. Lock on to those stocks that have a long history of paying large dividends.

  • 3

    After selecting a specific list of stocks to invest on, view their dividend paying history over a period of 5 years to calculate bond safety. There may be some new firms that have high rates of return, but they are new in the business and there are many types of risks associated with them. Deciding low risk stocks or high risk ones is totally your choice and it will not affect dividend capturing in any way.

  • 4

    Stocks must be owned by the recorded date to earn a profit. Usually companies pay dividends on the last day of each quarter.

  • 5

    Get a paid subscription of a stock information web service. It is necessary for every stock broker, as you will need real time updates on the changing costs of stock to capture a greater dividend. Also sign up for email notification by the company’s official website from which you wish to buy stocks.

  • 6

    Figure out the previous dividend date when you get a notification of an upcoming dividend payment. The previous dividend date should be two days before the date for the dividend payment. To get the most of your investment, buy stocks before the previous dividend date, and sell them when the price has touched the buying price or higher.

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