Dividend

Definition

A dividend is a payment a company makes to shareholders, usually in cash and often on a quarterly schedule.

How investors use dividends

• Generate income from investments
• Reinvest payouts to buy more shares
• Combine dividend income with long-term price growth

Dividend yield

Dividend yield is annual dividends per share divided by share price. A very high yield is not always good news—it can signal higher risk or an unsustainable payout.

Tax note

Dividend tax treatment can vary based on account type and whether dividends are qualified. Tax-advantaged retirement accounts can change how dividends are taxed.