A dividend is a payment made by a company to its shareholders, typically from the company's profits. It's a way for companies to share their success with investors who own their stock.

How Dividends Work:

• Payment Schedule: Usually paid quarterly (every 3 months)
• Amount: Typically expressed as dollars per share
• Ex-Dividend Date: Last day to buy stock and still receive the dividend
• Payment Date: When dividends are actually paid to shareholders

Types of Dividends:

Cash Dividends: Direct cash payments to shareholders, the most common type of dividend.

Stock Dividends: Additional shares given to shareholders instead of cash payments.

Dividend Yield:

Dividend yield is calculated as the annual dividend payment divided by the stock price. For example, if a stock costs $100 and pays $4 in annual dividends, the yield is 4%.

Investment Strategy:

Dividend-paying stocks can provide regular income, making them attractive for income-focused investors. However, high dividends don't always mean a good investment - always research the company's financial health.