What Are Dividends?

A dividend is a payment made by a company to its shareholders, usually from profits. On the ASX, dividends are typically paid twice a year (interim and final) and are announced several weeks before the ex-dividend date, which is the cut-off date for determining who is entitled to receive the payment.

To receive a dividend, you must own the shares before the ex-dividend date. If you buy shares on or after the ex-dividend date, you will not receive the upcoming dividend payment.

Franking Credits Explained

One of the unique features of the Australian dividend system is franking credits, also known as imputation credits. When an Australian company pays tax on its profits and then distributes those profits as dividends, the dividend may come with a franking credit that represents the tax already paid at the company level.

For Australian resident shareholders, franking credits can be used to offset their personal income tax liability. In some cases, particularly for individuals in lower tax brackets or retirees, the franking credits can result in a tax refund. This system effectively eliminates double taxation of corporate profits and makes fully franked dividends particularly attractive to Australian investors.

In the upcoming dividends data from 25 March 2026, some companies showed 100 per cent franking (meaning the dividend is fully franked) while others showed 0 per cent franking. Fully franked dividends are generally more tax-efficient for Australian resident investors.

Upcoming Dividends Snapshot (25 March 2026)

The data showed several companies approaching their ex-dividend dates:

Atlas Arteria (ASX:ALX) had an ex-dividend date of 25 March 2026, with a final dividend of A$0.20 per share and 0 per cent franking, yielding approximately 4.58 per cent at the current share price of A$4.37.

Perenti Ltd (ASX:PRN) had an ex-dividend date of 25 March 2026, with an interim dividend of A$0.033 per share and 0 per cent franking, yielding approximately 1.67 per cent at the current share price of A$1.948.

Several real estate investment trusts (REITs) also appeared on the upcoming dividends list, including Dexus Convenience Retail REIT (ASX:DXC), Centuria Industrial REIT (ASX:CIP), Centuria Office REIT (ASX:COF), Dexus Industria REIT (ASX:DXI), Garda Property Group (ASX:GDF), and Charter Hall Long Wale REIT (ASX:CLW). REITs are required to distribute a high proportion of their income to unitholders, which makes them popular income investments but also means they have limited retained earnings for reinvestment.

Dividend Yield Versus Total Return

Beginner investors often focus exclusively on dividend yield, which is the annual dividend expressed as a percentage of the share price. While yield is important, it is only one component of total return. Total return includes both dividends and capital appreciation (or depreciation).

A stock with a 6 per cent dividend yield that declines 10 per cent in share price delivers a negative total return of 4 per cent, despite the attractive yield. Conversely, a stock with a 2 per cent dividend yield that appreciates 15 per cent in share price delivers a total return of 17 per cent.

The most effective income investors consider both the yield and the sustainability of the dividend, the company's growth prospects, and the potential for capital gains or losses.