A portion of company profits distributed to shareholders, usually quarterly.
A dividend is a payment made by a corporation to its shareholders, typically from profits. Dividends can be paid in cash or additional stock. Most companies paying dividends do so quarterly, though some pay annually or monthly. Investors receive dividends per share owned; if a company pays $1 per share in annual dividends and you own 100 shares, you receive $100 annually. Not all stocks pay dividends—growth companies often reinvest profits into the business rather than paying dividends. Dividend-paying stocks are attractive to income-focused investors seeking steady cash flow. Dividend aristocrats (companies that have increased dividends for 25+ consecutive years) are viewed as financially stable. Dividends are taxed as income (or at preferential rates if qualified), making tax planning important for dividend investors.