Dividends

Dividends are a portion of a company's profits that are distributed to its shareholders as a return on their investment in the company's stock. Typically, dividends are paid out regularly, either quarterly, semi-annually, or annually, depending on the company's policy.

Investors often view dividends as a sign of financial health and stability in a company. Dividend-paying stocks are popular among investors seeking regular income from their investments, such as retirees or those looking for steady returns.

Dividends can be paid in cash, additional shares of stock (stock dividends), or other forms of property. The amount of the dividend is usually determined by the company's board of directors and is based on factors such as profitability, financial condition, and future growth prospects.

For investors, dividends can provide a steady stream of income and can also contribute to the total return on investment, along with any capital appreciation in the stock price. However, not all companies pay dividends, especially those in the growth phase that reinvest their profits back into the business for expansion or innovation.