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).
However, as companies mature they will often offer dividends to shareholders to sustain investors' interest by means other than mere capital appreciation.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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?
-
London claims victory in the Brexit warsOpinion JPMorgan Chase's decision to build a new headquarters in London is a huge vote of confidence and a sign that the City will remain Europe's key financial hub
-
Rachel Reeves's Autumn Budget: What it means for the UKOpinion A directionless and floundering government has ducked the hard choices at the Autumn Budget, says Simon Wilson
