Stocks & Investing

Dividend

A cash payment a company sends to shareholders, usually every quarter.

Some companies return profit to shareholders as dividends. You get paid just for holding the stock. Dividends are never guaranteed and can be cut. A very high dividend yield can be a warning that the market doubts the company can keep paying it.

For example

A stock paying $0.25 per share each quarter pays you $1 a year for every share you own. On a $20 stock, that is a 5% yield.

Related terms

Dividend YieldStockEarnings (Earnings Report)

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