The Dividends Index, or IDIV in Portuguese, is based on a theoretical portfolio of stocks issued by companies that offer investors the best levels of dividend payments, as well as interests over own capital. Stocks are selected according to their liquidity and their significance inside the portfolio is done according to their prices. Stocks that have presented best dividend yielding over the previous 24 months will be considered to compose IDIV calculations.
To be accepted into the calculations, stocks need to meet a series of criteria during the 12 months previous to their insertion in the index:
- Being part of a set of stocks that have trading indexes amounting to 99% of the accumulated value of all individual indexes;
- Being part of at least 95% of all trading sessions in the period.
If the company ceases to meet the above mentioned criteria, it will be excluded of the imaginary portfolio. Companies undergoing administration, bankruptcy procedures of facing special situations, or those that have had their trading suspended for a long period will also be removed from the index.
To compose the index, the dividend yield of each stock for the past 24 months is verified, added and listed in a decreasing order. All those stocks included in the 25% with best results will be added to the imaginary portfolio. Once included, the stock need only be among the 33% with best results to remain in the index.
The portfolio is reset using the above mentioned logic once every four months, considering always the periods between January through April, May through August and September through December.
This index will help investors learn which are the best paying companies – and therefore, more attractive to buy. Here are some examples of stock that participate in the IDIV: Vale, Grandene, Eletropaulo, Eletrobrás, among others.