Question about dividend payments on shares .....

[Gizmonster]

I've recently bought shares in 2 companies.
When the dividends are paid out, do they just pay out in the form of a cheque, or is there the option of having extra shares at the going price?
If they pay me a cheque, it obviously won't make financial sense buying a few shares, cos I'll get charged around £13 from my on-line share-buying service.
When I bought the shares, there wasn't an option of how I wanted my divis to be paid, but I'm wondering if there is the option of having divis paid in shares, if you catch my drift ......

[Tuvok]

Get in touch with the companies and ask them - some companies do offer it. I automatically have my dividends reinvested as shares.

[tonywiltshire]

The usual way of paying dividends is by cheque after the deduction of tax, some companies offer to re-invest in their shares but this is usually an opting in arrangement, if you are not sure how dividends are to be paid you can telephone and ask.

[dzug2]

The companies I have shares in are forever sending me letters suggesting I rceive dividends direct to my bank

In your case it may depend on exactly what services your online share-buying service provides - some will expect the dividends paid to them, and will hold it, reinvest it or pay it to you according to how you've instructed them

Others will tell the company to pay direct to you, by cheque or bank transfer.

[twix123]

The companies' registrars will send dividend cheques to whatever address supplied when the shares were transferred into your name. If you wish you can supply mandates to enable the dividends to be sent direct to your bank account.

Some companies offer a share re-investment scheme at the market price, with no dealing costs, whereas some other companies will pay their dividends with a choice of cash or as a 'scrip' dividend of new shares. Paying as a 'scrip' issue saves the company both in cash flow and, I believe, a certain amount of Corporation Tax. Should there be a 'scrip' option, you should receive information regarding your entitlement about 6 weeks before payment is due, in order to give you time to decide what action you wish to take.

[DTCwordfan]

some do and some don't - in short. Call the Company's registrar, often Equiniti, if not in-house.

[Gizmonster]

Thanks for all the replies peeps.
It looks like I'm gonna have to make a phone call or 2.
My on-line share trading is through my bank, so I'm wondering if they'd be able to sort it, or if I'm gonna have to contact the companies directly ??

[Tuvok]

Both banks and Sky that I have shares with automatically buy new shares for me and any dividend remaining is carried forward to the next time.

[Gizmonster]

Well I rang my bank today and was told that my account was automatically set to pay my dividends by cheque. That has now been changed, so all future dividends will be automatically re-invested as shares, but only where the company offers the option; as not all companies offer this option.

[Whoever]

If you buy your shares though an organisation like Hargreaves Lansdown, you can put the shares in a stocks & shares ISA and have your dividends automatically reinvested in the form of additional shares. check out their website h-l.co.uk. They are very helpful and will be able to answer any queries you have. And of course if you buy shares through an ISA up the annual allowance of c. £11,000 you won't have to pay any tax on them or declare the dividends to HMRC.