What Are Dividends?

What Are Dividends?

How They Work & Why They Matter to Investors

Dividends are payments made by companies to their shareholders, usually from profits. They offer a steady income stream and boost total returns.

Introduction

Companies distribute dividends in cash or additional shares. The amount depends on the company's earnings and dividend policy.

How Do Dividends Work?

Types of Dividends

Cash Dividend – Direct payout to shareholdersStock Dividend – Extra shares instead of cashSpecial Dividend – One-time bonus payout

Why Dividends Matter?

Provide passive incomeIndicate financial healthEnhance total investment returns

Dividend Yield Explained

Dividend Yield = (Annual Dividend / Share Price) × 100

Higher yield = More income, but check for sustainability!

Dividend vs. Growth Stocks

Dividend Stocks: Steady income, less volatility.

Growth Stocks: Reinvest profits, higher potential returns.

Who Should Invest in Dividend Stocks?

Retirees seeking regular income.

Long-term investors for wealth building

Conservative investors for stability

Things to Consider Before Investing

Dividend history & consistency

Company’s financial health

Industry trends & economic conditions

Conclusion

Dividends can be a powerful wealth-building tool! Invest wisely to enjoy steady income and long-term growth.