Dividend Stocks & Income

Dividend stocks pay shareholders a slice of profits in cash, usually every quarter. Here is how to read dividend yield and payout ratio, spot a dividend at risk, and use reinvesting to compound.

What a dividend is

A dividend is a cash payment a company makes to its shareholders, usually four times a year in the U.S. Mature, profitable companies with more cash than they need often pay dividends. To receive one, you must own the stock before the ex-dividend date; buy on or after it and the next payment goes to the seller.

Total return comes from price gains plus income. Dividends are the cash part.

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