Dividend Definition

A dividend is a distribution of a company’s earnings to its shareholders. Dividends can be issued as cash payments, as shares of stock, or other property. Most dividends are paid out quarterly.

When a company earns profits, the Board of Directors may decide to share some of those profits with the shareholders in the form of a dividend. The amount of the dividend is usually based on the company’s earnings and profitability, and the board may choose to change the dividend amount from year to year.

Dividends are typically paid out in cash, but they can also be paid in shares of stock or other property. Dividends are typically paid out quarterly, but some companies pay them monthly or annually.

Some companies have a policy of paying regular dividends, while others only pay dividends occasionally or when they have excess profits. Some companies never pay dividends, opting instead to reinvest their profits back into the business.