Dividends are payments that companies give to shareholders, usually from their profits. They represent a way for investors to earn money besides stock price increases.
How Dividends Work
- Companies like Procter & Gamble often pay dividends.
- Payment can be annually, depending on the firm.
- Investors receive cash per share, investing guide for McDonalds Corporation example $0.50 per share owned.
- Some companies also offer dividend reinvestment plans (DRIPs), letting you buy more shares automatically.
Why Investors Like Dividends
- Provide regular cash flow.
- Show company stability.
- Good for long-term growth when reinvested.
Examples:
- Tech companies like Apple and Microsoft pay dividends, combining growth and income.
- Financial firms like JPMorgan or Bank of America also reward shareholders.
- Utilities such as Duke Energy are famous for consistent payouts.
For beginners, dividend stocks can be a safe entry point, offering both steady income in value.
