How to handle Scrip dividends (or re-invested dividends) properly?

UPDATE Oct 2021: Find the comprehensive tutorial on Scrip dividends on StocksCafe Academy.

Sometimes, we have the option to choose between cash or shares when companies give out dividends.

In this tutorial, we will discuss how to properly handle the case where you have chosen shares in StocksCafe.

It is very simple. All you need to do is to create a new transactions with the following settings.

  1. Action = Buy

  2. Add to Cash Transactions = Checked
    Reason: You will receive the dividends in cash transactions and hence should check this so that your cash balance would balance.

  3. Scrip Dividend = Checked
    Reason: To indicate that this is a scrip dividend transaction

  4. StockCode = The company/stock that is issuing the shares

  5. Units Purchased/Sold = Shares that you will receive.

  6. Price Paid/Received = Total amount that you would receive if you have chosen cash / Shares you will receive

  7. Date = ExDate of the dividend
    Reason: It is important to set this to the ExDate so that StocksCafe can know that this scrip dividend transaction is for which dividend.

  8. Portfolio = The portfolio that would have received the cash dividend if you did not opt for shares
    Reason: It it important to set this correctly. Again, so that StocksCafe can know which dividend is this scrip dividend transaction is for.

  9. Currency = Currency in which the amount the dividend is given in (or leave it blank if the trading currency is same as dividend currency)

  10. Fees = 0 (or just leave it blank since default is 0)

  11. Total after fees = Total amount that you would receive if you have chosen cash (or leave it blank as it would be auto compute as Units x Price)
    Reason: It is important to ensure that it is the same as you would have receive if you have chosen cash as it is how StocksCafe know how much dividends you have re-invested.

Also, it is recommended to read this forum post as well for more context.

Note to self: This post is linked from StocksCafe. DO NOT DELETE.

2 Likes

Hi, i just did an update on the script collected for Mapletree NAC Tr following exactly the steps above.
my shares did increase, but the cash dividend collect did not subtract off, the result seems to conclude that i had script and cash (equal to script amount).

Basically the dividend amount before i update script and after remains the same, is it meant to be this way or did i miss any step?

image

Regards
Thanks.

Hi,

Yes, it is not supposed to change. The only place where you will see changes is here => https://stocks.cafe/personal/portfolio/xcollected?label_id=-1

It is because scrip dividends or not, you still did “received” the dividends, just that you used them to buy more shares of the same stock.

Cheers,
Evan

Hi Evan,
thanks for the clarification, all clear.

Cheers

1 Like

Hi, it’s the first time I am receiving scrip dividend and I am still a little confused about it despite reading the guides. Let’s take the recent scrip dividend exercise by OCBC for example. Am I correct to take the total dividend I am supposed to receive, divided by the total number of shares I receive? For example, I am supposed to receive 95.4 and got 13 shares. Would my units purchased/sold be 13 and price paid/received be 95.4 divided by 13 = 17.338. When I did this, the price on the transaction page is red and the total is also red when I mouse over. Is this normal? Thank you.

1 Like

Hi Marcus,

This looks good to me.

This is likely due to the date of transaction. StocksCafe assumes that the date of transactions should be ExDate of the dividend. (I remember some requested to add in PayDate as well but forgot if I already did it)

Cheers,
Evan

I think your math is off here. 95.4/13=7.3384 which is the correct cost of the new shares.

@maplebob Thanks! Opps… Did not check the calculation properly :slight_smile:

Hi, 1 question over here using the OCBC scrip on 7th October

Lets say we are suppose to be getting a original dividend of SGD 127.2, but as we choose to get the shares instead at 7.81 and during this case, we would have a rounded up share of 17 shares (ends up to have a value of $132.77 (scrip value)

Currently the formula for the Total dividend in the table form is equal to the scrip value + cash amount
e.g. 3,898.22(total amount) = 132.77(scrip dividend) + 3765.45 (cash amount shown in the chart)
the total amount of 3898.22 for this case actually only covers the 127.2 (original dividend)

Therefore my question is whether the total amount formula be 132.77 + cash amount received from previous dividends pay out?

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Interesting. However, I would do it in another way. Since the cash dividend is 127.2 and we got 17 shares. I would set the price per share to be 127.2 / 17 instead of 7.81

1 Like

for the recent RW0U scrip option

Price Paid/Received = Total amount that you would receive if you have chosen cash / Shares you will receive

am i supposed to enter $0.8574 (issue price for new unit) or should i use <dividends in cash / total units eligible rounded down> as fractional units will be discarded?

I would say this because that is amount of dividends that you have given up in exchange for the shares.

Hi Evan,

If I have chosen to receive part cash and part scrip dividend, how should I tweak the treatment?

Thanks in advance,
jllwang

Hi Jilwang,

This post should help -> How to handle part Scrip part Cash situations?

Cheers,
Evan

HI, I do not see the step 2 Add to Cash Transactions in the add transactions !

Hi,

  1. To see cash balance, you would need to turn it on by checking “Display Cash Balance (Will also add Cash Balance to Total Portfolio and Total Capital here. Read this for details)” here-> https://stocks.cafe/user/toupdateportfoliopreferences

  2. Actually, it is fine not to turn it on and just do not check “Add to Cash Transactions”.

Cheers,
Evan

Hi bros,

So this is still quite confusing to me, as I’ve started using the stocks.cafe with a bunch of pre-existing shares and some had a few scrip dividens that I chose to. Issue being I added those “trades” with $0 cost due to I don’t have the exact discounted per-share cost availble anymore, and what I know is I got say 1200 shares at what date.

That is fine in the proflio view (eg. overall market value is properly calculated). However I believe under the “Report” tab, there might be double couting in the Dividens. Eg. those counters I had added that had script dividends are still contributing to the “Dividends Projected Details (based on ExDate)” table…

What do you suggest to fix this properly? In the future I think I could do the above suggested way to enter the transcation using the discounted price, but what should I do for the previous “reinvested” shares?? Do I just live with them and ignore the incorrect (“inflated”) 2021 dividends?

Hi Nick,

There are two ways users generally think of and account for Scrip Dividends.

  1. Remove dividend and then add the new shares at zero cost.

  2. Do nothing about the received dividend and then add the new shares at actual cost (i.e. the dividend amount for the however many number of shares)

Personally, I recommend approach 2 because this is kinda what actually happens. The shares are not zero cost but at the cost of the dividends you would have received.

But either way work, it is your portfolio and you get to choose how you want to account for them :slight_smile:

So, in your specific case. You have two options to “fix” the issue.

  1. [If you want to follow the zero cost approach] Since you have 0 cost shares already, you can simply remove the corresponding dividends. Yes, you can “remove” dividends in StocksCafe and it will only affect your account. Simply go to this page and find the dividends and click on the delete icon.

  2. [If you want to follow the it is “not really zero cost approach”] First, you can compute your discount price simply by the total dividends you would have otherwise received and the total shares received.
    Discounted Price = Total Dividends / Total Shares
    So, simply change those 0 cost into “Discounted Price” then it would work.

Cheers,
Evan