Dividend
A share of profit paid out to shareholders.
Some companies return cash to investors as regular dividends. Others reinvest profits to grow instead.
A dividend is a slice of profit a company pays out to shareholders, usually as cash and usually every quarter. The dividend yield expresses it as a percentage of the share price, so a 2 dollar annual dividend on a 50 dollar stock is a 4% yield. Mature, cash-generating companies tend to pay them; fast-growing firms often reinvest everything instead.
Dividends are a real part of long-run stock returns, but the yield alone can mislead. A very high yield sometimes means the share price has collapsed on trouble, not that the payout is generous, and dividends can be cut. On the day a stock goes ex-dividend, its price typically drops by roughly the payout, since a new buyer no longer receives it.