Income
Dividend
A portion of a company's earnings distributed to shareholders, typically paid quarterly in cash or additional shares.
Example
A company paying a $0.50 quarterly dividend on a stock you own 200 shares of pays you $100 every quarter, or $400 a year, regardless of whether the share price moves.
Common Misconception
A high dividend isn't automatically a sign of a healthy company — an unusually high yield can signal the stock price has fallen sharply, or that the payout isn't sustainable.
Why It Matters
Dividends can be a source of steady income independent of selling shares, which is why they're a common building block in retirement income strategies.