Who will pay the highest dividends in Russia in 2021

The concept of dividends and payment terms

The concept of dividends is most fully defined in Art. Tax Code of the Russian Federation. The Code classifies as dividends any income received by a shareholder or participant when distributing profits.

However, the presence of net profit alone is not enough to accrue dividends. It is also necessary to take into account the rules established by Art. Law of December 26, 1995 No. 208-FZ “On JSC” and Art. Law of 02/08/1998 No. 14-FZ “On LLC”. The following restrictions are common to both main organizational and legal forms:

• full payment of the authorized capital must be made;
• net assets must be greater than the sum of the authorized capital and reserve funds, and this condition must be met even after the payment of dividends;
• the company should not have signs of bankruptcy, both at the time of making the decision to pay dividends and after their payment.

In addition to the general ones, there are also “specific” restrictions related to the characteristics of specific types of business entities.

For an LLC, a decision to pay dividends cannot be made until the value of the retiring participant's share has been paid.

The founders of a joint-stock company cannot begin the procedure for paying dividends if all the shares in respect of which they have the right to demand redemption have not been purchased from the shareholders.

Also, joint-stock companies must observe the order of payments depending on the category of shares - first preferred ones, which have advantages, then “ordinary” preferred ones, and then ordinary ones.

How to invest in all US dividend aristocrats at once

To get immediate exposure to these reliable dividend stocks, you can buy the ProShares S&P 500 Dividend Aristocrat Index ETF, which includes 64 stocks. The second option is to invest in a broader ETF, which is built on the basis of the S&P 1500 Composite index and includes large companies that have been regularly paying dividends for more than 20 years.

In addition to American indices from dividend aristocratic companies, there are others. For example, the S&P Europe 350 Dividend Aristocrats - which includes 350 European companies that have been consistently paying dividends for more than 10 years.

Dividend Aristocrat stocks include many ETFs to increase their reliability and attractiveness. For example, there are target funds whose goal is to outperform the dividend yield of the S&P 500 index. Below are some of them ↓

Dividend calculation

The calculation of dividends in a joint-stock company is carried out in several stages.

First of all, the total amount that the company can allocate for payment is determined, taking into account the conditions listed in the previous section and the recommendations of the Board of Directors.

First, the amount to be paid on preferred shares is determined. They pay a fixed dividend - this is the amount specified in the company's charter for each type of such shares. This can be a percentage of the par value of the stock or a fixed amount of money:

• Dp = Kp1 x Dp1 + Kp2 x Dp2 + ... + Kpi x Dpi, where Kp1 ... Kpi is the number of preferred shares of each type
• Dp1 ... Dpi - the amount of dividends per type of share

Next, the remaining portion of the allocated funds is distributed among the holders of ordinary shares. How to calculate dividends per 1 ordinary share can be seen from the formula:

• To = (D – Dp) / Ko, where D is the total amount allocated by the company for the payment of dividends
• Ko - number of ordinary shares

In LLC everything is much simpler. How dividends are calculated in this case depends only on the distribution of shares between participants. The formula shows how to calculate dividends per founder:

• Di = D x DLi, where D is the total amount of distributed profit
• DLi - participant’s share in the authorized capital of the company

Let's look at an example of calculating dividends for a joint stock company.

The authorized capital of the company is 1 million rubles. and divided into 1000 shares with a par value of 1 thousand rubles. Of these, 200 pcs. are privileged, and 800 pcs. – ordinary. Based on the results of the year, a decision was made to pay dividends in the amount of 120 thousand rubles. According to the charter, dividends in the amount of 20% of the par value must be paid for each preferred share.

Payments on preferred shares will be:

• Dp = 200 pcs. x (20% x 1000 rub.) = 200 pcs. x 200 rub. = 40,000 rub.

Payment amount per one ordinary share:

• Up to = (120 tr. - 40 tr.) / 800 pcs. = 80 t.r. / 800 pcs. = 100 rub.

The dividend rate is the ratio of the annual payment to the par value (or current market price) of the stock. In this case, for preferred shares it will be 20%, and for ordinary shares – 10%.

Which sectors of the US dividend aristocrats are the most profitable?

Let's consider what kind of profitability is obtained by industry. Thus, the maximum payments are made by the utilities, energy and real estate sectors. Sectors such as IT, industry and raw materials - most of the funds received are reinvested in production and development.

conclusions

Dividend payments directly determine the investment attractiveness of a company in the eyes of investors and stimulate the growth of share prices on the stock market. Investing in dividend aristocrats is profitable for a period of 20-30, since constant dividend income will result in greater profits regardless of crises.

It is also necessary to remember that high dividends paid by companies can signal the stagnation of the company, because they spend most of the net profit received to satisfy the interests of investors and shareholders, and do not direct it to development. Over the entire history of the S&P 500, more than 30% of the companies that were included in the index were either acquired or went bankrupt. Therefore, you should not just passively invest even in companies of dividend aristocrats, but it is recommended to constantly monitor their financial condition.

Procedure and terms of payment of dividends

Dividends in 2021 are paid based on the decision of the general meeting of shareholders (participants).

Many business owners are interested in whether it is possible to pay dividends in installments. The law allows you to do this once every quarter, half year or year. Because net profit is finally determined only at the end of the year, then quarterly and semi-annual payments are interim dividends.

The dividend payment date is tied to the date of the decision of the general meeting. For a joint stock company, the “cut-off” day is first determined, i.e. the date on which the list of persons entitled to receive them is recorded. The cutoff for dividends for 2021 should be set no earlier than 10 and no later than 20 days after the decision on payment is made (clause 5 of Article 42 of Law No. 208-FZ). The actual payment of dividends must be made within 10 days from the cut-off date - to nominee holders and trustees, and within 25 days - to all other shareholders.

For an LLC, the period for paying dividends should not exceed 60 days from the date of the decision (Clause 3, Article 28 of Law No. 14-FZ). The charter or minutes of the meeting of participants may provide for a shorter period. If it is not specified, then “by default” dividends must be issued within the 60-day period established by law.

The method of payment of dividends does not depend on the form of the legal entity. This may be the issuance of funds (both cash and non-cash) or the transfer of property.

When paying dividends, the company performs the functions of a tax agent for income tax or personal income tax, depending on the category of the income recipient.

For individuals, the personal income tax rate is 13% for residents (in the 2-NDFL certificate, the dividend income code is 1010) and 15% for non-residents (Article 224 of the Tax Code of the Russian Federation). The same rates (13% and 15%), depending on the resident status, are applied to income tax for legal entities (clause 3 of Article 284 of the Tax Code of the Russian Federation).

If the organization receiving the dividends owns over 50% of the authorized capital of the payer for a year or more, then a preferential rate of 0% is applied.

In this case, taxes are calculated taking into account whether the payer company, in turn, is the recipient of dividends. In this case, for dividend tax, the calculation formula is as follows:

• Н = К x Сн x (Д1 – Д2) К – share of dividends attributable to a specific recipient;
• Сн - tax rate on dividends
• D1 – total amount of dividends
• D2 - dividends received by the organization in the past or previous periods and not previously used to calculate taxes.

The above formula does not apply to payments in favor of non-residents. For them, the tax is calculated based on the total amount of dividends paid by the company (clause 6 of Article 275 of the Tax Code of the Russian Federation)

How to buy US dividend stocks

American dividend shares are traded on the St. Petersburg Stock Exchange. It organizes trading in foreign securities within Russian jurisdiction.

But an individual cannot buy shares directly on the stock exchange. This can only be done through a brokerage company - a professional intermediary on the stock exchange who carries out the investor's instructions, for example: “Buy ten shares of Exxon Mobil” or “Sell five shares of Chevron.”

The broker also registers the investor on the stock exchange. To do this, he needs to open a brokerage account. It is needed to take into account the investor's income. Before buying shares, money is deposited into the account, and after selling the securities, profits are withdrawn to it.

For any transaction with securities, the broker will take a commission. Each brokerage company has its own tariffs and conditions. Thus, some companies set a minimum deposit with which you need to top up your account in order to start investing. For example, 30 thousand rubles. Through other brokerage companies you can start investing money with any amount.

On average, the commission for transactions for all brokers does not exceed 0.3% of the total transaction amount. For example, if you bought shares for $200, you paid the broker $0.6 commission.

You can open a brokerage account for free and buy shares online through the Tinkoff Investments broker.

• Fill out an application for a brokerage account. For this you only need a passport.

• Wait until the broker issues it (no more than 2-3 days).

• When everything is ready, go to your personal account (Tinkoff will also give you access there), top up your account with a card, select the shares you need and buy them.

• Transaction commission from 0.025%. Depositing and withdrawing money is free, and you can start trading with any amount.

Read: How to invest in stocks correctly

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Bonuses: Some more high-dividend US stocks in 2021

Here are some more stocks with potentially high payouts to shareholders in the coming year:

• British American Tobacco (ADR) – up to 7.26%;
• Cheniere Energy – up to 6.79%;
• Ecopetrol – up to 6.73%;
• TFS Financial Corp. – up to 6.61%;
• Vodafone (ADR) – up to 6.30%;
• PPL Corp. – up to 5.69%;
• Mercury General Corp. – up to 5.59%;
• Franklin Resources – up to 5.25%;
• AbbVie – up to 5.16%;
• Canon (ADR) – up to 5.09%.

Please note that if an ADR is indicated in brackets, then this is not an American, but a foreign company that has received a listing on the New York Stock Exchange. It is not a fact that they are traded on the St. Petersburg Exchange.

Here is the TOP of US (and other countries) dividend stocks listed on the New York Stock Exchange or Nasdaq with the highest dividend yield. Let me remind you once again that this is not an investment recommendation, but information for reference. Before purchasing this stock (or any other), carefully analyze the company and its business. Russian dividend stocks in 2021, TOP 10 best dividend stocks, which Russian stocks to buy to get good dividends What you need to know about dividends in 2020-2021

Management of risks

Main principles:

• Investments must be diversified. Risky assets should be no more than 25%.
• The history of the company must be constantly monitored.
• Follow the indicator chart.
• Track growth rates and price fluctuations.

If the company's financial statements are poor, the share of risky stocks in the portfolio should be reduced.

Don't forget about taxes

The tax agent is the broker. He makes the necessary payments. The amount of deductions is 13% of the income received.