Calculating $ Dividends from ETFs

by Poppo
(Pennsylvania)

I know exactly how much my cash dividend will be from an individual
stock...x number of shares x $ am't. Simple. But how do I know how much
I'll earn from an ETF? Where does it tell me what the cash dividend will
be? Most sites will show a dividend yield but where do I get the actual
$ amount? For some reason I'm having a terrible time figuring it out.
Thanks for your help.






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Sep 08, 2019
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by: Mike

Hello Poppo,

This is a good question. You're right, the dividend amount you receive is the number of shares x the amount declared per share. For example, the most recent dividend from Microsoft was $0.46 per share, so if you own 1,000 shares then you'd receive $460 (pre-tax).

You'll find that the same is true for ETFs. ETFs trade like shares, so you will purchase a certain amount of shares or "units". For example, if you own the Vanguard S&P 500 tracker (VOO) then the most recent dividend you would have received (paid July 2019) would have been $1.386. At the time of writing, each share would cost you around $274 per share. Therefore, if you owned 100 shares (value of $27,400) then your most recent quarterly dividend would be $138.60.

Now it is true that, unlike many companies, you don't know the exact amount of your future dividend. For example, we can be fairly confident that Pepsico's next dividend will be $0.955 per share. Why? Because that is the level they've set this year's quarterly dividend at. Of course, this is not a guarantee but as long as the business trades ok then we can expect this payout. We don't know next year's level yet - management will let us know after their financial year end.

ETFs just receive a bunch of payouts from the underlying companies they own. Clearly they don't know what every exact payout will be so they can't "forward on" that income until they've received it. For me, I make a note of roughly when the ETF you own has historically declared their dividends. For example, the VOO dividend history is here: https://www.nasdaq.com/symbol/voo/dividend-history

I will then check that site or the providers site to see what the declared dividend per share is then multiply this by the number of shares I own.

I hope that helps!

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