A Dividend Is a Company's Way of Paying You to Own Its Stock: Here's How It Works.
Dividends are a good reason to buy stocks, but not the only reason.
Overview
What is a dividend? It's one of the best reasons to own stocks. It lets you get paid without working. It lets you share in the wealth created by the efforts of the world's best companies.
Dividends are income paid to shareholders, a way of being paid for owning a company's stock. When you own a company's stock and that company makes money, it shares part of that money with you.
Details
When a company has a profitable quarter of doing business, it will announce a dividend to be paid to shareholders. Dividends might often sound small, like less than $1 per share per quarter. But they add up over time.
Source
Originally published at www.fool.com.
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