Glossary

Dividend

A dividend is the part of a company's profits that are distributed to shareholders.

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?

Recommended

Marking to market
Glossary

Marking to market

This is the process of updating a portfolio to reflect the latest available prices.
23 Jun 2022
Advertising in MoneyWeek
Glossary

Advertising in MoneyWeek

To book magazine, email or website advertising, please contact:
13 Apr 2022
What is a stock split?
Glossary

What is a stock split?

A stock split increases the number of a corporation's issued shares by dividing each existing share.
4 Apr 2022
Cyclically adjusted p/e ratio (Cape)
Glossary

Cyclically adjusted p/e ratio (Cape)

A classic price/earnings ratio is the relationship between the current share price and one year's earnings, usually the last year, or a forecast for t…
6 Mar 2022

Most Popular

How to find the best dividend stocks
Income investing

How to find the best dividend stocks

Stocks that pay dividends tend to outperform the market over the long run - as well as providing an income. Here, Rupert Hargreaves explains the best …
28 Jun 2022
Gold has been incredibly boring to own – but that’s no bad thing right now
Gold

Gold has been incredibly boring to own – but that’s no bad thing right now

Stocks, bonds and cryptocurrencies have all seen big falls this year. But gold remains at its one-year average. It may be dull, but it’s doing what it…
29 Jun 2022
What the end of the 1970s bear market can teach today’s investors
Stockmarkets

What the end of the 1970s bear market can teach today’s investors

The 1970s saw the worst bear market Britain has ever seen, with stocks tumbling 70%. Things have changed a lot since then, says Max King. But there ar…
28 Jun 2022