Long-term investing
Dividend
Definition
A dividend is a payment a company makes to its shareholders, usually in cash and, for many US companies, every quarter. The board decides each payment and can raise, cut or suspend it at any time. Our guide to dividend investing covers how dividend stocks work.
Example
Say you own 200 shares of a company that pays a quarterly dividend of $0.50 a share. You receive $100 each quarter, or $400 a year, usually as cash in your brokerage account, though many brokers let you reinvest it automatically in more shares. If the board later cuts the dividend to $0.30, your quarterly payment drops to $60.
Hypothetical numbers, for illustration only.
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