What is Dividends?
A dividend is a portion of a company's profits distributed to shareholders, typically quarterly (US) or annually/semi-annually (UK, EU, India). Dividends are declared by the board of directors. Key dates: declaration date (announcement), ex-dividend date (must own before this), record date, and payment date. Dividend yield = annual dividend รท stock price.
Why it matters for investors
Dividends represent a meaningful portion of long-term equity returns โ historically ~40% of S&P 500 total return. Dividend-paying companies tend to be mature, profitable, and have predictable cash flows. "Dividend Aristocrats" (S&P 500 companies that have raised dividends for 25+ consecutive years) are a popular subset for income-focused investors.