Glossary : Dividend

Word : Dividend

Meaning : A portion of earnings of a company that is distributed to its stockholders. Dividends are paid as a certain sum per share. They become payable only when approved by the board of directors and are usually declared at regular intervals.

Dividends may be in the form of cash, stock, or even property. A dividend can provide an 'income' from the share ownership in addition to any gain (or loss) due to share price movements.

High-growth or newer companies often do not pay dividends as their profits are reinvested to help generate further growth.