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Investing in Dividend Stocks in Belgium

Investing in Dividend Stocks in Belgium

Thinking about investing in dividend stocks in Belgium? In this article, our Belgian company formation advisors give you a brief overview on the subject.

What are dividend stock investments in Belgium?

Investments in dividend stocks represent investments in shares of blue chip companies – generally regarded as safer investments – which offer dividends. This way, investors can enjoy receiving cash deposits on a regular basis into their bank accounts, brokerage accounts or through the mail. 

General information on dividend stock investments in Belgium

In Belgium, dividends are generally paid once a year. The majority of corporations pay dividends between the months of April and July. Dividends in Belgium are proclaimed out of the net value of the company revenues, before corporate and withholding tax. The withholding tax in Belgium which is applied on dividends is currently set at 25%. Our Belgian company formation experts can provide you with more details related to these aspects. 

Minimizing the risk when investing in dividend stocks in Belgium

Sometimes, a high dividend payment does not necessarily involve that the company in which you invest is successful. Take a few moments to analyze the following aspects when investing in dividend stocks in Belgium:

• Choose stocks which have a debt to equity ratio (a financial ratio which indicates the proportion of shareholder’s equity and debt utilized to finance the assets of a corporation) smaller than 50%. Meaning, the business has USD 1 of net worth for each USD 1 of debt;

• Avoid those companies which have a dividend payout ratio (the amount of dividends paid to shareholders connected to the amount of the entire net income of a corporation) smaller than 60% to 70%, as there are too few resources left for the company development. Our company registration representatives in Belgium can provide you with further information on this matter;

• Search for companies which have a p/e ratio (the price earnings ratio, which means a market prospect ratio which calculates the market value of a company which is listed on the stock market – our company formation professionals in Belgium can offer more information on what the p/e ratio consists of) of maximum 15;

• Look for businesses with pricing power. This means, companies which can increase their prices to counteract a high inflation rate and therefore, which are able to keep sending you cash as dividends.

If you need more details about dividend stocks in Belgium, or if you need assistance to open a Belgian company, please contact us.