What is a Dividend? A Simple Explanation 

Whether you are just starting to invest or have been investing for decades, dividends can be a valuable part of anyone’s investing portfolio.  

However, you’ll typically see dividends associated with those getting closer to retirement who are not looking for as much growth in their investments but are more so looking to supplement their income. 

A dividend is a distribution of a portion of a company’s earnings paid to the shareholders.

What is a Dividend?

Many companies that payout dividends are well-established and stable companies. By paying a dividend, they attract investors creating more demand for their stock.

Why Companies Pay Dividend

Many companies won’t pay dividends for several reasons, the biggest being it hurts their bottom line.

Why Companies Don’t Pay Dividend

Earning a dividend is an easy feat to accomplish. The company will automatically pay to your brokerage account at distribution time by buying a stock or mutual fund that pays out dividends.

How Do You Earn A Dividend?

– Walmart – Exxon Mobil – PepsiCo – Procter and Gamble

Four Companies That Pay Dividend

– Find Companies With Strong Track Record – Find Sustainable Dividend – Annual Increase Streak – Always Reinvest Dividend

Four Dividend Investing Tip