Complete Guide to Expected Dividends in 2023 - Everything You Need to Know

Expected Dividends 2023: Major Companies and Ex-Dividend Dates

Below is the list of the main expected dividends for 2023 according to the updated information as of July 1. This overview includes tech giants like Apple, Microsoft, and Meta, financial institutions such as JP Morgan, Santander, and PayPal, as well as companies from the entertainment sector.

*Estimated data

What Are Dividends Really? Basic Concepts for Investors

A dividend represents the portion of profits that a company decides to distribute among its shareholders as a reward for their investment. It is not simply a passive income, but a mechanism through which companies acknowledge the trust placed in their capital by investors.

Companies classify the distribution of their profits mainly in two ways: through cash or via new shares. In practice, most opt for cash, as investors generally seek real liquidity rather than a greater fragmentation of their shareholding.

There is a special category called “Dividend Aristocrats” which groups companies with an exceptional track record: they have paid consistent dividends for at least 25 consecutive years, periodically increasing them. This distinction reflects financial stability and commitment to shareholders.

Payment Modalities: Fixed Dividends versus Flexible Dividends

The dividend distribution system in 2023 is structured around two fundamental categories:

Fixed Dividend: The Shareholders’ Meeting sets a predetermined monetary amount that is paid invariable. This is the mode adopted by most large corporations.

Flexible Dividend: Offers shareholders the option to choose between receiving cash, new shares, or a hybrid combination of both. This option is more common in banking entities.

Additionally, there are three classifications based on the nature of the payment:

1. Ordinary Dividend: Derived from normal business operations and forecasted according to usual performance.

2. Supplementary Dividend: Paid once financial projections are confirmed, especially if results exceed initial expectations.

3. Extraordinary Dividend: Arises from one-time income such as asset sales or business stakes.

Key Dates Every Investor Must Know

To avoid losing the right to receive dividends expected in 2023, it is essential to know four critical dates in the financial calendar:

1. Declaration Date: When the Shareholders’ Meeting officially approves the distribution, establishing the amount, payment date, and record date.

2. Record Date: Determines which shareholders are entitled to the payment. You must be the holder of the shares at the close of this day to qualify for the payout.

3. Ex-Dividend Date: Marks the decisive cutoff point. Those holding shares until this date will receive the dividend, even if they sell the next day. A buyer after this date will not receive anything in the next payment.

4. Payment Date: The day funds are actually credited to the shareholder’s account.

Factors That May Affect Dividend Payments in 2023

Although the dividends planned for 2023 were carefully scheduled, various events can impact their realization:

Deterioration of Results: If during the fiscal year revenues fall below projections, the company may reduce or eliminate the dividend. To avoid stock market penalties, some companies maintain the payment by charging it against reserves instead of profits, a temporary solution that does not address the core issue.

Unexpected Risks: Major lawsuits, operational crises, or financial tensions can lead to a temporary suspension of dividends.

Regulatory Restrictions: After the COVID pandemic, the European Union banned dividend payouts in companies rescued by member states, a precedent that could recur in future systemic crises.

Extraordinary Income: Asset sales or surplus of unexpected profits often generate additional dividends.

Control Changes: In mergers or acquisitions, the new management may eliminate dividends citing financial stability criteria.

Taxation of Dividends: What You Must Pay

In most jurisdictions, dividends are subject to taxation as investor income. In the Spanish system, applicable to many European investors, cash dividend yields follow this progressive scale:

• Up to €6,000: 19% withholding
• Between €6,000 and €50,000: 21% withholding
• Between €50,000 and €200,000: 23% withholding
• Over €200,000: 26% withholding

If you receive dividends in the form of shares, taxation is deferred until the sale, using as a basis the initial purchase price weighted with the new shares received.

How to Calculate Your Actual Dividend Yield

Determining the exact profitability of a dividend requires two essential metrics:

**Dividend per Share (DPA): ** Calculated by dividing the total dividends paid out by the number of shares outstanding.

**Dividend Yield (RD): ** Expresses the DPA as a percentage of the current share price, showing the real return on your investment.

Practical Example

Suppose “Bank Investment” generates €10 million in profits and distributes 80% (8 million) among shareholders. With 340 million shares outstanding, the DPA would be €0.0235 per share. If the share trades at €1.50, the dividend yield would be approximately 1.56%.

This formula allows you to objectively compare dividend yields across different companies and assess whether it aligns with your investment goals for 2023.