shares dividends

[Darren Bent]

When we will get dividends from our shares and is it annual stuff or twice a year stuff ?

Also how will Royal Mail pay shares dividends to us ? Taxed or Tax free ?

[TrueBlueTerrier]

All questions are answered in the guide that RM sent out. But after a google search I found this link which is a PDF of that document
http://www.myroyalmail.com/sites/defaul ... ochure.pdf" onclick="window.open(this.href);return false;

Quotes from it.

Also, like other shareholders, you will be eligible to receive any
dividends we pay.

How often we pay dividends and how much
we pay will depend on many things, including
our company’s performance and future
investment plans.

How will I receive dividends?
For your Free Shares, any dividend payments
will be paid straight into the bank account we pay
your salary into. If Equiniti does not have details
of your bank account, they will send a cheque to
your registered home address.
For any shares you buy under the Employee
Priority Offer and hold in your name on the
ordinary shareholder register, you can choose
which bank account to have your dividends
paid into. If you do not give Equiniti details
of a bank account, they will send a cheque
to your registered home address.
Will I have to pay income tax on any
dividends I receive?
Dividends are taxable income. How much
income tax you have to pay will depend on your
personal tax status. All dividends (whether the
shares they relate to are held in the SIP, or
held in the Royal Mail Nominee Share Service
or in your name on the ordinary shareholder
register) are received with the benefit of a tax
credit. This means that if you are a basic-rate
taxpayer or pay no tax, you will have no further
tax to pay on the dividends. Otherwise, you will
have to pay extra tax under self-assessment.

[wacko74]

I'm a bit confused by the dividends as I'd heard that ''the higher the share price goes the less attractive/lower the value of the dividend becomes''??

Surely the opposite is true?.. 6% divi on 100 shares at £3.30 is less than a 6% divi on 100 shares at £5.80?

[RobertT]

The first dividend is due in July 2014. How much we get or indeed whether we get anything at all will depend on how much profit RM make.

I'm a bit confused by the dividends as I'd heard that ''the higher the share price goes the less attractive/lower the value of the dividend becomes''??
Surely the opposite is true?.. 6% divi on 100 shares at £3.30 is less than a 6% divi on 100 shares at £5.80?

Dividends are paid out on a price per share basis, so if the divi is 5p per share and we own 600 shares then we'll get £30. The percentage only really relates to those people that actually bought shares. The lower the price at which you bought them the higher the dividend yield/percentage will be.

[TrueBlueTerrier]

What is a dividend?
A dividend is a portion of a company’s profits
that the company pays to its shareholders.
Companies do not have to pay dividends. Our
directors will decide when and how often we
will pay dividends to shareholders, and how
much these dividends will be. Companies
often pay an interim and a final dividend
each financial year. While you hold shares
in the SIP, you will receive any dividends
that we pay to our shareholders.
How often we pay dividends and how much
we pay will depend on many things, including
our company’s performance and future
investment plans.

[clashcityrocker]

The first dividend is due in July 2014. How much we get or indeed whether we get anything at all will depend on how much profit RM make.

I thought RM had guaranteed the first year dividend - a minimum of £90?

[biscuit1957]

I was told two dividends a year,December then July

[TrueBlueTerrier]

The first dividend is due in July 2014. How much we get or indeed whether we get anything at all will depend on how much profit RM make.

I thought RM had guaranteed the first year dividend - a minimum of £90?

Not guaranteed, but intimated

In respect of the 2014 year, in the absence of unforeseen circumstances, Royal Mail intend to propose a final dividend only, to be paid in July 2014, of £133 million. This amount is approximately two-thirds of the notional full-year dividend of £200 million that the directors believe they would have proposed if the company had been listed throughout full year 2014.

While the company intends to pursue a progressive dividend policy thereafter, dividends are not guaranteed and, if payable, will vary, says Hunter, noting that Royal Mail has adopted a dividend policy that looks to supports its aim of generating value for shareholders while ensuring that it retains sufficient capital to invest in growing the business.

- See more at: http://www.ifamagazine.com/review/royal ... 6tXCg.dpuf" onclick="window.open(this.href);return false;

[OnAFlyer]

I'm a bit confused by the dividends as I'd heard that ''the higher the share price goes the less attractive/lower the value of the dividend becomes''??

Surely the opposite is true?.. 6% divi on 100 shares at £3.30 is less than a 6% divi on 100 shares at £5.80?

The dividend percentage drops as the share price increases. At £3.30 they were saying around 6%, at £5.80 it will be under 4%.

So if you bought £5k worth at the start and they are now worth £8k+ the dividend should still be the same as it's paid at a lower percentage.

However, if you buy the shares at today's prices then you only get the <4% dividend so it isn't as attractive to new investors.

[wacko74]

Ah right thanks for them replies... I didn't realise the actual percentage drops for anyone buying the shares at a higher price... seems a bit of an unfair system, the more you pay for your shares the less divi you get? Also sounds like a nightmare to calculate come divi time... effectively every single shareholder has a specific percentage tailored to whatever price they bought their shares at... glad I'm not the one who has to sit down with a calculator and a pen and paper and do them sums!!

Also another thing.. what happens if you bought more than 1 lot of RM shares at different prices??

[cloherty1976]

Ah right thanks for them replies... I didn't realise the actual percentage drops for anyone buying the shares at a higher price... seems a bit of an unfair system, the more you pay for your shares the less divi you get? Also sounds like a nightmare to calculate come divi time... effectively every single shareholder has a specific percentage tailored to whatever price they bought their shares at... glad I'm not the one who has to sit down with a calculator and a pen and paper and do them sums!!

Also another thing.. what happens if you bought more than 1 lot of RM shares at different prices??

It's very simple they will just give a amount per share. Example 10p per share. If you hold 500 shares your get £50 but if you hold 5000 shares your get £500

[wacko74]

Believe me, when it comes to maths nothing is simple for me!!

[cloherty1976]

Believe me, when it comes to maths nothing is simple for me!!

Make it easy and just put the money in the bank

[wandle]

....effectively every single shareholder has a specific percentage tailored to whatever price they bought their shares at... glad I'm not the one who has to sit down with a calculator and a pen and paper and do them sums!!

Also another thing.. what happens if you bought more than 1 lot of RM shares at different prices??

No, it is a lot simpler than you realise.
When trying to assess the income that a company's shares will give (the 'yield'), you need to know what amount of dividend is to be paid. The dividend, for UK companies, is paid in PENCE PER SHARE. It is not paid as a percentage of the share price. But financial analysts will advise their clients to buy (or sell) the shares if the yield is good (or bad). To make it easier to compare the yield of different companies, they portray the yield as a percentage. But daily movements in the share price mean that percentage changes daily! The actual DIVIDEND PAYMENT remains static, unless the company decides, at the next set of results, to increase or decrease it.

For example, company XYZ Holdings floats at a share price of 100p. It intends to pay a dividend of 6p/share in it's first financial year. So a buyer of the shares at 100p gets a return (yield) of 6% . However, the company was massively undervalued by it's previous owners. The share price soars to 250p. Someone buying shares at that price is still entitled to the 6p dividend. But 6÷250 gives a yield of only 2.4%.
But both shareholders get paid 6p for each and every share they own!

Simples!

[wacko74]

Thanks for that Wandle... that does explain it on the kind of level that I can just about follow!