Dividend
التوزيعات النقدية (الكوبون)
A dividend is a distribution of part of a company’s profits to its shareholders, usually paid in cash per share. In the Egyptian market the cash dividend is commonly called the “coupon” and must be approved by the company’s general assembly before payment. Companies may also distribute profits as bonus shares instead of cash.
Example
A company earning 5 EGP per share may distribute 2 EGP and retain 3 to reinvest. The 2 EGP arrives as cash; the 3 EGP stays in the business and should, if invested well, show up later in the share price.
Why it matters
Dividends are the part of a return you receive without selling anything, which matters to anyone using a holding for income rather than growth. They also signal what management believes about the durability of earnings.
A common mistake
Reading a large dividend as strength. A company can pay out more than it earns by drawing on reserves or borrowing, and a payout that is not covered by earnings is usually a temporary one.
Live example from the Egyptian market
The next cash dividend on the EGX: CI Capital Holding for Financial Investments (CICH), EGP 0.57 a share. Details →
See it in action