|Cum-dividend||Shares purchased cum-dividend ARE eligible for the next dividend payment. This is normally the day after the payment date.|
|Dividend Declaration||When the dividend is declared, the company announces 3 dates :- The ex-dividend (XD) date, the record date and the payment date. They will also declare the amount of the dividend, stated in pence per share. They usually will re-state or re-define their dividend policy.|
|Dividend||Distribution of earnings to shareholders paid in the form of money, stock, scrip, company products, or property. The amount is decided by the Board of Directors and in the UK, is usually paid twice yearly.|
|Dividend Cover||The ‘safety factor’ of the dividend. It is the EPS divided by the dividend. For example, if a company has an EPS of 6p and pays out 3p per share in dividends, then it has a dividend cover of 2 (6p / 3p). The average dividend cover of the 89 companies in the FTSE 100 which pay dividends, at the time of writing, is 2.3. With a dividend cover of less than 1, the company is paying dividends out of ‘reserves’.|
|DRIPs||Dividend Re-Investment Plan. Instead of dividends being paid in cash, they are re-invested in shares in the company.|
|EPIC||Exchange Price-Interchange (Computer) Code - Assigned by the London Stock Exchange as a means to identify stocks by a short (3 or 4 character) code, rather than the full company name.|
|EPS||The company’s Earnings Per Share. Its total earnings divided by the number of shares in issue.|
|Ex-dividend||Shares purchased ex-dividend are NOT eligible for the next dividend payment.|
|Ex-dividend Date||The date when a share begins trading without the dividend included in the price. For FTSE350 companies, this is always on Thursdays.|
|Final Dividend||Typically around 2 / 3 of the total annual dividend. The total annual dividend less the Interim Dividend.|
|FTSE Quarterly Review||Meetings to review the constituents of the FTSE100 and FTSE Mid-250 are held on the Wednesday after the first Friday in March, June, September and December. Any constituent changes are then implemented on the next trading day following the expiry of the LIFFE futures and options contracts, which normally takes place on the third Friday of the same month. Promotion/Demotion decisions are based on the companies' relative market capitalisation at the close of business on the Tuesday prior to the Quarterly Review Meeting. The rules the Committee will apply are as follows:
* A security will be promoted into the FTSE100 at the quarterly review if it rises to 90th position, or above (by market capitalisation).
* A security will be removed from the FTSE100 at the quarterly review if it falls to 111th position, or below (by market capitalisation).
The above observations are mandatory. However, if a security is 101st or below, but doesn't fall to 111th, this does not mean it will stay in. It may still be necessary to remove it to make way for the mandatory inclusion of others. Equally, if a security rises above 101st but is not in the top 90, it may still gain entry if a FTSE 100 member becomes subject to the mandatory exclusion rule. The thresholds for the FTSE Mid-250 are 325th or above for automatic entry and 376th or below for automatic deletion. Companies in the range 326th to 375th are subject to rules similar to the FTSE 100 rules for companies in the range 91st to 110th.
|Interim Dividend||Typically around 1/3 of the total annual dividend. The reason it is not a half of the annual dividend is that it allows the dividend to be altered later in the year if events change the companies profitability.|
|MCap||Market Capitalisation is the current share price multiplied by the total number of shares issued (what the 'market' believes a company is 'worth'). In the '100' and '250' sheets, 'Rank' indicates the current position in the FTSE 350 based on MCap.|
|Payment Date||The date that the dividend actually gets paid to the person who owned the shares on the ex-dividend date and whose name was on the share register at record date.|
|P/E Ratio||Price/Earnings Ratio is a stock analysis statistic in which the current price of a stock is divided by the actual (or sometimes projected, which would be forecast) earnings per share of the company. Also referred to as the ‘multiple’.|
|Record Date||The date on which a shareholder must officially own shares in order to be entitled to the dividend. For FTSE350 companies, this is the next day (Friday) following the ex-dividend date. It is the date when the registrar actually instructs the company as to who is the beneficial owner of the shares for later dividend payment.|
|Sector||The market, or industry sector that a company operates in.|
|Stock Dividend||Payment of a corporate dividend in the form of stock rather than cash. This may be additional shares in the company, or shares in a subsidiary being spun off to shareholders. Stock dividends are often used to conserve cash needed to operate the business. Unlike a cash dividend, stock dividends are not taxed until sold.|
|Tax Liabilities||In the UK, dividends are declared and paid net at 10% tax. Unless you are a higher rate tax payer, there is no further tax to pay. Currently, the extra tax, collected via your Self Assessment, is an additional 25% of the net dividend. For example, on a gross dividend of 100p, a non-higher rate tax payer receives 90p. A higher rate tax payer pays an additional 25% tax on the 90p already paid, i.e. 22.5p, making a total tax paid of 32.5 (32.5%).|
|Uncovered Dividends||The payment of dividends greater than its EPS. See ‘Dividend Cover’.|
|Yield||The total annual dividend, divided by the current trading price of the share, expressed as a percentage. For example, on an annual dividend of 17p, with a current price of 400p, the yield will be 4.25% (17 / 400).|