12:12 GMT+3 / 24.06.2024

Can a company not pay dividends on shares?

The goal of an ordinary investor when buying shares is to earn on the growth of the market value of securities, as well as to receive dividends if the issuer pays them.

The company earned a lot – the company paid a lot to investors. Usually dividends depend on the generated profit for the financial period. This attracts investors, because the benefits are twofold: dividends and a possible increase in the value of the shares themselves.

However, it's too early to rejoice. Firstly, there is no guarantee that the shares will become more expensive. Secondly, it is not a fact that the company will pay dividends.

Can the issuer not pay dividends

If you answer briefly, it can.

For example,

  • If the company does not pay dividends in principle. Not all stocks are dividend-paying. For example, according to the dividend policy, Yandex does not pay shareholders anything at all.
  • If the company has not made a profit. Usually, the amount of dividends depends on the company's profit. And here it is necessary to study the company's dividend policy, since there are a lot of nuances. For example, the target level of dividends in Gazprom is at least 50% of net adjusted profit. However, this very "correction" is quite complicated. Due to various factors, the company may reduce dividends, for example, if a certain EBITDA level is exceeded.
  • If the General Meeting of Shareholders decided not to pay dividends. It also happens that the board of directors made a recommendation not to pay dividends at all during a certain period, even though the company had a profit. For example, there are plans to spend all the money on expansion. The owner of a controlling stake is likely to "push through" the board's recommendation at the meeting, and private shareholders will remain without payments.


However, this applies only to holders of ordinary shares, not preferred ones.

It is worth saying that large blue-chip companies are trying to pay dividends regularly. Sometimes they even pay more than the dividend policy implies. For example, to keep large investors. Therefore, it is recommended for beginners to consider blue chips.

Also, dividends are usually fixed on preferred shares, and the investor is almost guaranteed to receive payments. However, there are few such stocks on the market, they are less liquid and profitable.

In general, it is quite difficult for a newcomer to the market to choose a company in whose shares it is worth investing in order to get the maximum profit from dividends. Therefore, it is worth contacting professionals here. Alternatively, you can find a private financial adviser, but there is a risk that the person will not be as professional as the advertisement says. In addition, private financial consultants work with very large capitals. If your portfolio is conditionally one million rubles, then the services of such a specialist are simply not profitable.


Another option is to contact a broker who has a strong staff of analysts who monitor the securities market on a regular basis. There are quite a few such brokers on the Russian market now, but one of the best can be called BCS World of Investments. First of all, this is indicated by the rating compiled by the Moscow Stock Exchange, distributing brokers' investment ideas by relevance and profitability. Thus, it turns out that you can trust the broker. Numerous customer reviews of the broker BCS World of investments. People who have experience in servicing BCS often note as a plus exactly relevant and timely analytics, as well as working investment ideas, using which investors get a tangible plus in their portfolios.

For example, in the subject of the article, we note that in the reviews about the BCS, there are quite often mentions of the "BCS Dividend Basket" auto-inheritance strategy. If you are a beginner and you are interested in earning income from dividends, then it is worth taking a closer look at it.

Of course, in this text we do not impose the services of this particular broker in any case. BCS is here as an example, and which broker, strategy and stocks to choose – the decision is yours alone.

Conducting trading operations in financial markets with margin financial instruments has a high level of risk and can lead to losses and loss of investment funds. When starting trading, make sure that you are fully aware of all the risks, as well as have the appropriate knowledge and experience for trading.

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