Dividend

A dividend is the part of a company’s profits that are distributed to shareholders. They are usually given as cash (cash dividend), but can also be given in the forms of stock (stock dividend).

High-growth companies seldom offer dividends, because they are more concerned with reinvesting profits in the business. This is so they can maintain above average growth.

However, as companies mature they will often offer dividends to shareholders to sustain investors’ interest by means other than mere capital appreciation.

Dividend payments also send out a message that the company is financially stable and on the right track as dividends are a good sign of the company’s financial health.

• See Tim Bennett’s video tutorial: How to pick income winners: What are dividends?

MoneyWeek magazine

Latest issue:

Magazine cover
Cleaning up

Profiting from the fight against pollution

The UK's best-selling financial magazine. Take a FREE trial today.
Claim 4 FREE Issues

Which investment platform?

When it comes to buying shares and funds, there are several investment platforms and brokers to choose from. They all offer various fee structures to suit individual investing habits.
Find out which one is best for you.


28 May 1937: the Volkswagen car company is formed  


On this day in 1937, Volkswagen, now the world's second-biggest vehicle-maker, was founded as the 'Society to Prepare the German People's Car'.

The Kids' Portfolio: the four best funds to buy for your children

Investing for your children's long-term future is an excellent idea. But what should you buy? The Kids' Portfolio is a simple collection of four funds intended to be tucked away for 20 to 40 years.