Dividend
A portion of a company's earnings distributed to shareholders.
Definition
A dividend is a distribution of a portion of a company's earnings to its shareholders, decided by the board of directors. Dividends can be paid in cash or additional shares of stock. They are typically paid quarterly, though some companies pay monthly, semi-annually, or annually. The dividend yield is calculated by dividing the annual dividend per share by the stock price. Companies that consistently pay and increase dividends are called "dividend aristocrats" (25+ years of increases) or "dividend kings" (50+ years). Dividends provide income to investors and signal financial health, though not all profitable companies pay dividends — many growth companies reinvest profits instead.