A payment made by a corporation to its shareholders, usually from profits.
A dividend is a distribution of a portion of a company's earnings to its shareholders. Dividends can be issued as cash payments, shares of stock, or other property. Most dividends are paid quarterly, though some companies pay monthly or annually. Dividend-paying stocks can provide a steady income stream for investors and may indicate a financially healthy company. The dividend yield (annual dividend divided by stock price) helps investors compare dividend-paying stocks.
If you own 100 shares of a company that pays an annual dividend of $2 per share, you'll receive $200 in dividend income per year. If the stock price is $50, the dividend yield is 4% ($2 ÷ $50).