The ex-dividend date: from when are you entitled to the dividend?

A dividend is not paid to whoever holds the share on the day of payment. It goes to whoever held it before a specific date, the ex-dividend date (in French, "date de détachement"). This rule explains situations that surprise beginners: a share that falls on the day it goes "ex", a purchase made too late that gives no entitlement, or a dividend received even though you sold in the meantime. Here are the 4 dates to know and what they change in practice.

The 4 dates of a dividend

The calendar of a dividend always follows the same logic, with 4 dates:

The declaration date. The company announces the proposed amount and the timetable. For a French company, the amount is then voted by the general meeting.
The ex-dividend date ("ex-date"). From that day, the share trades without the right to the dividend: whoever buys it will not receive it. In practice this is the date that decides whether you are entitled to the payment.
The record date. The central depository fixes the list of shareholders entitled to the dividend. It generally follows the ex-date by 1 to 2 trading days, depending on the market's settlement cycle.
The payment date. The dividend is paid into the accounts of registered shareholders.

Buying before or on the ex-date: who is entitled to the dividend?

The practical rule fits in one sentence: to receive the dividend, you must hold the share at the close of the session before the ex-dividend date.

A purchase made the day before the ex-date, before the close, gives entitlement to the dividend.
A purchase made on the ex-date no longer does: the share already trades without the dividend.
A sale made on the ex-date or after does not remove the entitlement of whoever held the share the day before.

A one-day error is enough to change the result. That is why a tracking tool must use the quantity held the day before the ex-date to calculate the dividends actually received.

Why does the price drop on the ex-date?

The dividend is a sum leaving the company for its shareholders: the value of the company falls by that amount. On the ex-date, the price therefore generally adjusts by an amount close to the dividend.

Fictitious example. A share trades at €50 the day before the ex-date and pays €2 per share. On the ex-date, all else being equal, it opens around €48. The shareholder who held it the day before owns a share at €48 and a €2 dividend to receive: before tax and costs, their wealth is the same, the value is simply distributed differently.

This adjustment is a mechanical tendency, not an exact rule: the price also moves for other reasons that day (market, news).

Can you "capture" a dividend by buying just before?

Buying the day before to collect the dividend, then selling on the ex-date, offers no guarantee of gain. The price generally falls by an amount close to the dividend (the gap can differ), and the operation exposes you to brokerage fees and market risk during the holding period. Fees matter: see the impact of brokerage fees on performance. The dividend is only one part of what a shareholder receives, the other part being the change in price.

Where to find these dates and what to look at alongside them

The dates appear in company announcements and in the dividend calendars of brokers and financial news sites. Beyond the dates, you look at whether the dividend is sustainable: the payout ratio, free cash flow and payment history. See dividend yield and payout ratio and free cash flow.

Key takeaways

Entitlement to the dividend depends on holding the share at the close of the day before the ex-dividend date.
A purchase on the ex-date no longer gives entitlement to the dividend.
The price generally falls by an amount close to the dividend on the ex-date: this is not, in itself, a loss of value for the shareholder who receives it (before tax and costs).
The declaration, ex-dividend, record and payment dates are distinct. The ex-date is the practical reference: a purchase on the session before it gives entitlement to the dividend, a purchase from that day on does not. Legally, entitlement is fixed at the record date of positions.

In Earnnest, the ex-dividend date of each position is visible for free; the forecast dividend calendar for the portfolio is included with the Pro plan.

This article is for information and education only and does not constitute personalised investment advice. The figures in the examples are fictitious and illustrative. It does not cover the tax treatment of dividends.