Definition: Payments made to shareholders by corporations. When a company earns profit, the company can use the money to either re-invest in the business (called retained earnings) or to give shareholders as dividends or share repurchase. Many corporations keep a portion of their profit and pay the remainder as a dividend.

Explanation: Corporations can pay dividends in the form of cash, stock or property. Most large profitable companies offer dividends to their stockholders. Their share prices might not move much, but the dividend they pay make up for this.

Higher-growth companies typically don’t offer dividends because their profits are reinvested to help continue their higher than average growth.
BEGINNERS: Learn To Trade Stocks

Intro to Stocks   IPO
Trading Rules   Bid
Volume Precedes Price and Confirm Price Patterns   Ask
Trade with the HTMW Game   Market Order
Making Your First Stock Trade   Ticker Symbol
P/E Ratio   Stock Quotes
Dividend   Stock Charts
Dividend Yield  

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