Dividend - Stock Trader Glossary

A dividend is a distribution of a portion of a company's earnings to its shareholders. Dividends are typically paid out in cash, but they can also be paid out in the form of additional shares of stock or other property. Dividends are usually paid on a regular basis, such as quarterly or annually, and are typically announced by the company's board of directors.

Dividends are one way that companies can return value to their shareholders. Companies that pay dividends are generally considered to be more stable and mature than companies that do not pay dividends. However, not all companies pay dividends, and some companies may choose to reinvest their earnings in the business rather than pay them out as dividends.

Dividend payments can also have tax implications for shareholders. In the United States, qualified dividends are taxed at a lower rate than ordinary income, making them an attractive investment for many investors. However, it's important to consult with a tax professional to understand the specific tax implications of dividend payments.

In summary, a dividend is a distribution of a portion of a company's earnings to its shareholders. Dividends are usually paid out in cash on a regular basis, and are one way that companies can return value to their shareholders. Not all companies pay dividends, and dividend payments can have tax implications for shareholders.