Dividend definition
Dividends are payments a company makes to share profits with its stockholders. They’re one of the ways investors can earn a regular return from investing in stocks.
Dividends can be paid out in cash, or they can come in the form of additional shares. This type of dividend is known as a stock dividend.
Dividend yield is the company’s annual dividend divided by the stock price on a certain date. Investors use the dividend yield to be able to accurately compare dividend stocks. Dividend payout ratios are also an important measure that tell you how much of a company’s income is put towards dividends versus reinvesting in the company.
But not all stocks pay dividends. If you are interested in investing for dividends, you will want to specifically choose dividend stocks. Companies that increase their dividend payments year after year are usually less volatile than the broader market. And the steady income from dividends can help smooth out a stock’s total return.
» Need a brokerage account? Check out our picks for the best online brokerages for dividend investing
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Life insurance buying guide
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See how to get your business started quickly
Dividend definition
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What is a mortgage refinance?
Compare types of bank accounts
Quick tips for where to exchange currency
Determining how much mortgage I can afford
What is YouTube Premium?
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Receiving payments from clients
How to bid on TAP seat upgrades with SeatBoost
How much does HBO Max cost per month?
What are dividend stocks?
What is a credit freeze?
Parts of a Check
What is a reverse mortgage?
What type of income is not taxable?
What is margin trading?
Investing money is personal
What is a construction loan?
About Healthy Paws pet insurance
VA loan eligibility
What is a Closing Disclosure?
U.S. passport renewal
What is a VA home loan?
HELOC and home equity loan interest deduction rules
The basics
7 of the best apps to make money
What is umbrella insurance?
How to get paid on YouTube
What is a tax ID number?
What is a conforming loan?
National first-time home buyer loans
What is a financial planner?
What is a high-interest loan?
Mortgage options
About the Works Frontier bundle
What is a codeshare flight?
What is wealth management, and what does a wealth manager do?
Tuition and fees continue to decrease
What to expect flying American Airlines Main Cabin Extra
What is a goodwill letter or late payment removal letter?
Is Upwork a legit way to make money?
1. Certificates of deposit (CDs)
Microsoft Office Excel budget templates
When are taxes due in 2024?
The best time of year to sell a house
How long does bill negotiation take?
Online marketplace and auction sites
What is personal property insurance?
6 things to know about United's delayed flight compensation
When did rental car prices get so high?
How to invest in oil
What ANA miles are worth
The best Southwest sweet spots
1. Set goals to save for a house
Supreme Court blocks student debt cancellation
American Airlines AAdvantage
How does capital gains tax on real estate work?
What is a mortgage underwriter?
The best budget apps
Step 1: Check your credit
What is ChexSystems?
How to estimate your home insurance
What is my net worth?
How to use this calculator
January
1. Strengthen your financial profile
How does a second mortgage work?
1. Your information
How people use reverse mortgages
What does homeowners insurance cover?
What Medicare covers for outpatient mental health services
1. Set your budget
The best car insurance
What are closing costs?
When are you considered a first-time home buyer?
What is the child tax credit?
When is a construction loan used?
Most profitable small businesses
How much will refinancing save?
Why you shouldn’t gift a house
50/30/20 budget calculator
How to detect credit card fraud
1. Make extra payments toward the principal
Good Neighbor Next Door houses
Why is having a low credit utilization important?
How does the SALT deduction work?
How does refinancing work?
What are the best retirement plans for you?
How to save money while traveling
How do LLC taxes work?
What does professional liability insurance cover?
Creating a greeting card business in 7 simple steps
How to start a meal prep company in 7 simple steps
Income, expenses and debt
How much does FHA mortgage insurance cost?
At a glance
How much is YouTube Premium?
Buy down the interest rate: Is it worth it?
The state of award charts to Europe
VA loans vs. conventional loans
How to find a currency exchange near you
Does United fly direct to Hawaii?
What is a home equity loan?
End of the model year
Best ways to consolidate credit card debt
How does a lady bird deed work?
The best Emirates first class benefits
Average savings account rate: 0.46%
How long does it take to close on a home?
How does a jumbo loan work?
1. Figure out how much you can afford
Key takeaways
Best fleet fuel cards
How do brokerage accounts work?
How to use the pre-qualification calculator
What are virtual reality stocks?
1. Get the match
How to compare FHA vs. conventional loans
1. Assess your situation
What are the three credit bureaus?
Reviewing the Closing Disclosure
When to consider a rate and term refinance
What is a manufactured home?
How does an FHA 203(k) loan work?
How do you buy down a mortgage rate?
What is Frontier’s GoWild Pass?
Average retirement savings balance by age
What are grants for nonprofits?
Can you negotiate all of your bills?
1. Choose a room that locks
1. Letting the dealer mark up your interest rate
What to look for in a business internet service provider
Student debt was already a greater problem for women
How to earn ANA Mileage Club miles
What is a business credit score?
The best Chase transfer partners
Top 11 spot Bitcoin ETFs by fee
How to make money online
50 best small businesses to start
The best money-making apps
How much do Instagram influencers make?
Do your industry research
11 best investments right now
Types of TIN numbers
How to freeze your credit with all 3 bureaus
Key takeaways
2. Check number
What is a margin call?
How to refer a friend for an AmEx card
How do wealth managers get paid?
What is PIP insurance in Florida?
What’s a good credit score with FICO vs. VantageScore
Earn bonus TrueBlue points through JetBlue Vacations and Paisly
Do goodwill letters work?
The best life insurance for seniors in April 2024
28 ways to save money
How do sinking funds compare with other savings accounts?
How does a VA home loan work?
How much is life insurance?
Breakdown of central air costs
Delta SkyMiles
What happened at the MOHELA Senate hearing
Why the Chase Sapphire Preferred® Card is better for most people
Property type
How long does underwriting take?
Top credit cards you can use instantly after approval
Guardian Life insurance
Conforming loan limits 2024
Best crypto credit cards
5 steps to get preapproved for a home loan
What you’ll pay for outpatient mental health care
Buying on margin example
How much are closing costs?
What does a financial planner do?
How high-interest loans are harmful
2. Check investment fees
What is the 50/30/20 rule?
How to lower your credit utilization
How to get Upwork jobs
What does the GoWild Pass cost?
How a home equity sharing agreement works
Leverage your union's strike fund
Cheap car insurance
Making estimated tax payments
How the home sale tax exemption works
YNAB, for hands-on zero-based budgeting
How does ChexSystems work?
Processing issues delay financial aid offers
20 high-dividend stocks
Advantages and disadvantages of reverse mortgages
How to find your federal student loan servicer
1. Request a balance transfer
What income is tax-free income?
How much is the child tax credit worth?
Construction loan types
What are dividend stocks and why buy them?
2. Ask yourself 2 questions
Applying for a U.S. passport for the first time
How we ranked the top life insurers
Google Sheets budget templates
How to find affordable rental cars
2. Scour your budget for ways to save
How much money do I need to buy a house?
How many Instagram followers do you need to make money?
The mortgage underwriting process
Best place to exchange currency: Your bank or credit union
How umbrella insurance works
Best car insurance in Massachusetts overall: Travelers
What happens at a mortgage loan closing?
3. The date
Black-led and Black-owned mortgage lenders
Healthy Paws pet insurance plans and coverage
How much money do you need for wealth management?
How to apply for a VA loan
2. Refinance if you have good credit and a steady job
The best homeowners insurance companies of 2024
Who can qualify for Good Neighbor Next Door
How to write a late payment removal letter
2. Cash management accounts
3 best brokers for forex trading
Median retirement savings balance by age
Research your provider and the competitors
What does personal property insurance cover?
Does a partial payment affect your credit score?
How life insurance rates are determined
Payment history
Am I stuck with Aidvantage until my loans are paid off?
How low can it go?
End of year or quarter
Individual taxpayer identification number (ITIN)
Information you need to freeze your credit
Chase Sapphire Preferred® Card
February
Jumbo loan requirements
2. Set a savings goal for the upfront costs
How do reverse mortgages work?
The value of this perk
2. Shop for a loan
How to choose a brokerage account provider
Money Worship
How to invest money
Student loan refinancing calculator
Here’s what to do on Roth 401(k) vs. Roth IRA:
Who operates codeshares?
Other reasons not to gift a house
What does Florida PIP insurance pay for?
Projected student loans could surpass the federal cap
Government grants for nonprofits
What is the SALT deduction?
When to refinance a mortgage
How LLCs pay income taxes
What isn’t covered by professional liability insurance?
Pros and cons of home equity sharing agreements
2. Negotiating your monthly payments
How are business credit scores calculated?
Payments resume in October
Step 2: Pre-qualify and compare offers
How does a home equity loan work?
Guardian Life insurance policies
2024 conforming loan limits by county
4. The recipient's name
Preapproval is not the same as pre-qualification
The pros and cons of a life insurance trust
Are paid surveys worth it?
What’s behind the pre-qualification calculation?
Who offers first-time home buyer assistance?
3. Do your research
How to book Main Cabin Extra
What is a mobile home?
What the buyer gets out of it
FHA vs. conventional loans
How the Frontier GoWild Pass works
Mortgage payoff calculator help
The strategy behind sinking funds
Itemizing or taking the standard deduction
Women could see their lifetime earnings reduced
When to choose a no-penalty CD
Korean SkyPass
How much is YouTube Music?
How to monetize your Instagram with fewer followers
Episode transcript
Investing for income: Dividend stocks vs. dividend funds
Calculating net worth: What are assets and liabilities?
How does FIRE work?
Brex Card
Understanding margin calls
What Medicare covers for inpatient mental health services
MassHousing highlights and eligibility requirements
7 top virtual reality stocks by one-year performance
What data do the credit bureaus maintain?
Limited FHA 203(k) loans
Best life insurance for seniors in April 2024
What if I didn't make the 2024 tax deadline?
Is it a good time to sell a house now?
2. Carry a padlock for your luggage when staying in a hostel dorm
VA home loan eligibility
FHA insurance vs. PMI costs
How we got here
Filing your tax return at tax time
How to start a cleaning business in 7 steps
Pros and cons of a lady bird deed
Historical national rates
2. Make a larger down payment
Conforming loan benefits
Types of second mortgages
Money Avoidance
Making referrals: Caveats and considerations
How to determine your closing costs
Typical Frontier Airlines fees you can otherwise expect
Wealth management strategies
4. Be honest about what it will take
VA loan qualifications: credit, debt and income
JetBlue partner airlines and hotel partners
NerdWallet’s budget planner
How to negotiate lower bills
Who needs professional liability insurance?
5 best business internet service providers
What is identity theft?
3. Automate and maximize savings
What mortgage can I afford?
What is a Bitcoin strategy ETF?
Who qualifies for the home sales tax exclusion?
Another money-change option: online currency converters
You can’t correct submitted FAFSAs yet
3. Consider the length of the mortgage loan
Two kinds of reverse mortgages
What do federal student loan servicers do?
2. Wait for the transfer to go through
What you’ll pay for inpatient mental health care
Do I need a financial planner?
Requirements: Who qualifies for the child tax credit?
What’s not covered
Dividend vs. growth stocks
Roth 401(k) vs. Roth IRA
A potential ‘Hail Mary’ fix
Despite FAFSA hiccups, it remains a top priority
Buying a manufactured home
Goodwill letter template
3. High-yield money market accounts (MMAs)
3. Buying overpriced extras
Who might prefer the Capital One Venture Rewards Credit Card
What’s TAP Air Portugal’s business class like?
Minimum down payment
What does umbrella insurance cover?
Best budget auto insurance in Massachusetts: Geico
March
5. The payment amount
3. Determine other ownership costs
First-time home buyer benefits and programs
Why is a codeshare flight important?
What can cause a 3-day closing delay?
Buying a Good Neighbor Next Door home
Your passport may need at least six months' validity remaining
Standard FHA 203(k) loans
When to choose a savings account
Do personal credit scores affect business credit scores?
How to reach Aidvantage customer service
Fare deals to Europe
5 ways to make money on Instagram
Around certain holidays
How far in advance should I get preapproved for a mortgage?
How to enroll
Best car insurance companies: Our winners
How long will your mortgage loan last?
Pros and cons of virtual reality stocks
Retirement savings by age
How to pay off a mortgage early
401(k)s and other employer-sponsored retirement plans
How to save money on road trips
How to apply for a VA home loan
Women didn't have to lose their jobs to be at a disadvantage
How much money do you need to invest in oil?
Credit utilization
Removing mortgage insurance
No union to help? Plan ahead
ANA Mileage Club
Is YouTube Premium worth it?
Top 8 Bitcoin strategy ETFs by fee
How long do you stay on ChexSystems?
Employer identification number (EIN)
Do you include a 401(k) in a net worth calculation?
Average interest checking account rate: 0.08%
3. Consider paying points
6. Memo line
How does a life insurance trust work?
Money Vigilance
Referral bonus annual limits
What’s the difference between pre-qualification and preapproval?
How to claim the child tax credit
How are dividends paid out?
Will I qualify for student loan refinancing?
Wealth manager credentials
5. Embrace the learning curve
How to report credit card fraud
Who’s covered under Florida PIP insurance?
Where do the credit reporting bureaus get their data?
Rate and term vs. cash-out refinancing
Goodwill letter vs. credit dispute letter
FHA loan requirements
Limitations of the Frontier GoWild Pass
Should you use bill negotiation services?
3. Don’t leave your stuff unattended
Can you have too many sinking funds?
Collect the right tax forms from your lender
Efforts to combat hidden and junk fees
Other loan forgiveness pathways expanded
What it means for your money
Taking advantage of tax deductions
Where to exchange currency outside the U.S.
What can I use a home equity loan for?
How to unfreeze your credit
Guardian life insurance rates
What you need to bring to the closing
What is a nonconforming loan?
4. Choose the right type of mortgage
What to know if you take online surveys
What Original Medicare doesn’t cover
Closing costs calculator
Types of financial planners
Healthy Paws coverage options
What a good credit score can get you
What if you can’t wait that long to renew your passport?
What the seller gets out of it
The Federal Trade Commission’s budget worksheet
How much is professional liability insurance?
7 types of identity theft and the warning signs
Is investing in oil safe?
4. Save raises and windfalls
What eligibility requirements are borrowers still expected to meet?
What the flight is like
Does Max cost the same as HBO Max did?
Goodbudget, for hands-on envelope budgeting
1. High-yield savings accounts
Blue Cash Preferred® Card from American Express
Qualifying for a second mortgage
7. Bank name
Am I eligible for a reverse mortgage?
4. Find the right car for you
What to look for in a high-interest loan
Report errors or ask questions ASAP
Good Neighbor Next Door mortgages
American Airlines premium economy vs. Main Cabin Extra
Choosing a manufactured home lot
203(k) eligible projects
4. Peer-to-peer lending
When are state taxes due in 2024?
Local sales
4. Extending the loan
At a glance: No-penalty CD vs. savings account
Which card should you get?
Using the mortgage points calculator
Can I get a bank account if I’ve been denied?
Net worth calculator
How do you set up a lady bird deed?
3. Pay off your balance
What happens when you get a margin call?
Massachusetts first-time home buyer programs
Money Status
Who pays the closing costs?
There are better ways to transfer a house
3. Enroll in autopay
Tips for avoiding late payments
Are sinking funds right for you?
Pros and cons of VA home loans
What doesn’t impact your life insurance premium
Women with debt and no degree are most at risk
Other factors beyond your control
What is a good business credit score?
Working YouTube Premium costs into your budget
Real-life example: My family’s trip to Lisbon and Barcelona
Best car insurance in Massachusetts for having few customer complaints: Mapfre
What to keep in mind
How does a HELOC work?
April
Guardian Life insurance customer complaints and satisfaction
What you'll pay at closing
8-9. Routing and account number
How the card's Priority Pass benefit compares with other credit cards
Other coverage options
How to accept a referral for an AmEx card
How to qualify for first-time home buyer benefits
The other way to save on Frontier fees: Elite status
6 types of dividends
VA loan down payment requirements
4. Leave your valuables at home
Understanding the oil markets
5. Earn some extra money
Virgin Atlantic Flying Club
The Bitcoin ETF price war
Mortgage insurance
Home equity loan rates in 2023
Mixed-status families still face FAFSA glitches
4. Take advantage of first-time home buyer programs
5. Know how mortgage interest rates work
What else you need to know
How to open a brokerage account
Best high-interest loan alternatives
What does a construction loan cover?
How to buy virtual reality stocks
Restrictions and waiting periods
If you need student loan help
Is PIP insurance all you need to drive in Florida?
5. Paying bogus fees
At a glance: No-penalty CD vs high-yield CD
Understanding the taxes you might need to pay
What umbrella insurance doesn’t cover
Does HBO Max allow password sharing?
Does pre-qualification affect your credit score?
Additional child tax credit
Are my finances stable enough to refinance?
Can other types of data help my credit reports?
When is refinancing to a lower rate worth it?
Cost of a manufactured home
Negotiating a buydown
More ways to take charge of your budget
How to find the best professional liability insurance
Average cost of term life insurance by age
Other partners worth considering
Where to avoid exchanging currency
Step 3: Choose your lender and loan
How to invest in dividend stocks
More about Guardian Life insurance
Venmo Credit Card
Types of life insurance trusts
What's next?
5. Contact the seller or visit a dealership
The bottom line
Is a wealth manager worth it?
Get more help with monthly budget planning
What affects your credit score?
Alternatives to Good Neighbor Next Door
What is American Airlines Main Plus?
How much of your fee goes to Upwork?
5. Online savings accounts
Is this the right time for you to sell a house?
Clothes, vintage and crafts
What isn’t covered by personal property insurance?
Why trip planning should start with rental car prices
Find ways to get help with loan payments
Do spot Bitcoin ETFs have custodianship risk?
Adoption taxpayer identification number (ATIN)
Compare your net worth
How do you get a second mortgage?
Choosing a card
How do construction loans work?
What to expect from the credit card fraud investigation
What are the other 2024 tax deadlines to know?
Is the Frontier GoWild Pass worth it?
Foundation grants for nonprofits
5. Get travel insurance so your belongings are covered
Get control of your personal finances
Earning Southwest Points
6. Track your progress and keep going
Tips to get through mortgage underwriting
Skip currency exchange: Use a credit or debit card
Do you qualify for borrower defense forgiveness?
How to fit HBO Max into your budget
Best Massachusetts auto insurance for ease of use: Farmers and Progressive
Alternatives to a lady bird deed
May
Pros and cons of jumbo loans
Healthy Paws pet insurance rates
Why doesn’t my report show a credit score?
VA loan property requirements
4. Make biweekly payments
5 types of employer-sponsored retirement plans
Bottom line: Choose the right balance
Setting up your own freelancer retirement plan
Ways to get the best home equity loan rates
Average certificate of deposit rate: 1.81% for one-year CDs
5. Shop around with multiple lenders
What are fleet cards?
How to increase your pre-qualification amount
Types of mortgage loans
Is there an income limit to qualify as a first-time home buyer?
Rate and term refinance guidelines and costs
How much is the SALT deduction?
LLC payroll taxes
What does a shared equity agreement cost?
What is the VA loan limit?
Are there more sustainable investments than oil?
What if you don’t live in New York City?
Who needs umbrella insurance?
2. Certificates of deposit
Students and parents: Here’s what you can do
How to freeze your child’s credit
6. Shop mortgage lenders like a bargain-hunter
10. Signature
Can you delay a margin call?
The most popular surveys for cash apps
When to expect your child tax credit refund
How to get a good credit score
Refinancing with an FHA 203(k) loan
How buydowns differ from ARMs
Share resources with other strikers
Citi Custom Cash® Card
6. Inspect and test-drive the car, if applicable
Brokerage accounts are taxable accounts
Alternative wealth management services
Eligibility for other VA loans and grants
How to get American Airlines Main Cabin Extra Seats for free
Manufactured home loans
IRAs
Average cost of whole life insurance by age
What do the approvals mean for Bitcoin?
Step 4: Gather loan documents
6. Consider alternative types of mortgages
How do fleet cards work?
Receiving referrals: Compare referral welcome offers
Getting the most from your pre-qualification limit
5. Pay off capitalized interest
6. High-yield checking accounts
Protecting yourself while staying in a shared space
Extra personal property coverage for valuable items
Southwest Airlines sweet spots recapped
Hiring someone versus doing it yourself
EveryDollar, for simple zero-based budgeting
How much can you borrow with a home equity loan?
Preparer tax identification number (PTIN)
HELOC requirements
Margin call causes
Are credit scores from all major bureaus the same?
How much does it cost to refinance a mortgage?
3 tips to control central air conditioning installation costs
How to redeem ANA Mileage Club miles
How to complain about Aidvantage
How much umbrella insurance do you need?
How to apply for borrower defense to repayment
June
2024 child tax credit news update
Who qualifies for an FHA 203(k)?
How to do well on Upwork
Refinancing a VA home loan
Full list of the best auto insurance companies in Massachusetts
3. Bonds
When should you freeze your credit?
How to get a construction loan
How to book a codeshare flight
Consider a Discount Den membership instead
How repayment of the equity investment works
Calculating capital gains tax on a home sale
Find the best homeowners insurance in your state
How to get a home equity line of credit
7. Determine which warranties are right for you
Closing costs for the buyer
Discounts
6. Stick to the standard repayment plan
Why are passport processing times suddenly so slow?
When will I get my refund?
Electronics
LLC self-employment taxes
Student loan servicer switches
Credit score requirements
Exchange frequently? Consider a multicurrency account
Home equity loan requirements
How long does it take to get pre-qualified for a mortgage?
How buydowns differ from discount points
Is Upwork the right freelance marketplace for you?
Why do I need a business credit score?
Jumbo loans and conforming loan limits
Brokerage accounts vs. IRA
Financial planner vs. financial advisor
State availability
How to evaluate dividends
How can I check my credit reports?
How do I get an FHA 203(k) loan?
How to find the best refinance rates
United Airlines flight delay compensation recapped
Types of VA home loans
How to settle a dispute with Aidvantage
Chase transfer partners to avoid
What do the approvals mean for other crypto investments?
NerdWallet home insurance calculator methodology
Cons of a credit freeze
July
Average money market account rate: 0.66%
Gemini Credit Card
Which type of life insurance should I put in a trust?
Margin call example
Codeshare flights, recapped
How to earn or redeem TrueBlue points with other JetBlue travel partners
What is the average and median retirement savings?
What taxes aren’t covered by the SALT deduction?
Cost of life insurance without a medical exam
Step 5: Submit your application and get funded
How much can you borrow with a HELOC?
Find local conforming loan limits
Servicing changes are underway
7. Use 'found' money
If you’re thinking about buying Frontier’s GoWild Pass …
Retirement accounts for small-business owners and self-employed individuals
LLC sales taxes
How to finance central air installation
How do I get my business credit score?
The best place to exchange currency at the end of your trip
How much does umbrella insurance cost?
How applying can affect your loans
Are home equity loans a good idea?
What are the best dividend stocks?
Capital One Venture Rewards Credit Card
Fleet fuel cards: benefits and drawbacks
8. Negotiate the best price
Learn more
Consumer experience
Renew your U.S. passport now
Manufactured homes: Pros and cons
Are FHA 203(k) loans a good idea?
Tax Day resources
Why is it called the SALT tax?
Where to get a home equity sharing agreement
What else is being done to curb junk fees?
Other key student loan changes underway
Best ways to earn Chase points
Ways to get the best jumbo mortgage rates
A welcome return to normality
How many times can you use a VA home loan?
Will you owe capital gains taxes on your home sale?
How to get umbrella insurance
How much money can you make on YouTube?
Empower Personal Dashboard, for tracking wealth and spending
Credit freeze or credit lock?
Consequences of a child tax credit error
What if I see a mistake on my report?
Refinancing a mortgage, step by step
Currency exchange: Frequently asked questions
How to find cheap United flights to Hawaii
August
What is the highest credit score, and how many people have it?
How much personal property insurance do you need?
Junk Fee Prevention Act
Maximum debt-to-income ratio
Is Main Cabin Extra worth it on American Airlines?
LLC tax forms and deadlines
How to avoid capital gains tax on home sales
Key terms in this story
Important considerations when opening a Roth IRA
Who can access your frozen credit reports?
9. Maximize trade-in value, if applicable
The bottom line
Average cost of life insurance by term length
Bottom line: Is umbrella insurance worth it?
The difference between interest rate and APY
What homeowners insurance won't cover
State child tax credits
What else do credit bureaus do?
Consider all your options
Should I choose a home equity loan, HELOC, or cash-out refinance?
Is getting a HELOC a good idea?
Fuel card vs. business gas credit card
Healthy Paws vs. competitors
Which small business internet service is right for you?
11 ways to prevent identity theft
Earn an audience, and earn more in the long run
September
10. Make the purchase
What is the $500 credit for other dependents (ODC)?
Are dividends taxed?
Redeeming through the Chase's travel portal
U.S. Bank Cash+® Visa Signature® Card
How to avoid a margin call
How to make a personal property claim
LLC tax tips for business owners
The final decision
What is credit card consolidation?
Types of FIRE
Other types of mortgage loans
Child tax credit vs. child and dependent care credit
Next steps
Other ways to make money
4. Money market funds
More resources on investing
How taxes on real estate, rental, and investment sales work
PocketGuard, for a simplified budgeting snapshot
October
How the FDIC calculates national rates
FHA vs. conventional loans: Summary
Transfer points to your TrueBlue account from Chase, Citi or American Express
Types of FHA loans
How ANA elite status works
How does credit card consolidation work?
Does your business need a fleet fuel card?
Summary: 2021 MassHousing first-time home buyer programs
If you want to transfer Chase points
United MileagePlus credit cards to help get you to Hawaii
Is it better to get a home equity loan or line of credit?
Is there an over-55 home sale exemption?
5. Mutual funds
November
Final thoughts on all the ways to save money on travel
Is consolidating credit card debt a good idea?
What to do if you can’t keep up with your HELOC payments
Bank of America® Premium Rewards® credit card
Other life insurance options for seniors
Important policies to be aware of
Can I still use my credit card after debt consolidation?
Limitations of FIRE
Margin trading risks
6. Index funds
Honeydue, for budgeting with a partner
How to book Emirates first class
December
Does homeowners insurance cover ... ?
The bottom line
More about buying life insurance as a senior
FHA loan limits
Corporate grants for nonprofits
Closing costs for the seller
Next steps
Cheapest car insurance by state
Ways to maximize value in Emirates first class
The bottom line
Bilt World Elite Mastercard® Credit Card
Types of homeowners insurance policies
Which Hawaiian island should you choose?
More about top-rated life insurance companies
How to apply for an FHA loan
How we review pet insurance
How to make money from home
Budgeting resources from NerdWallet
7. Exchange-traded funds
10 ways identity theft happens
Pros and cons of FHA loans
What it's like flying ANA
How to get cheap car insurance
Other home insurance companies to consider
Methodology to identify the best budget apps
Other notable options
8. Stocks
Risks of getting cheap auto insurance
Best perks of flying first class on Emirates
Ways to get the best FHA mortgage rates
Major issuers and their policies on instant credit access
How homeowners insurance works
If you fly ANA airlines this year
How to make money offline
9. Alternative investments
10. Cryptocurrency
Full list of the best car insurance companies
11. Real estate
Best car insurance companies by state
How to find grants for nonprofits
How to report identity theft
How to start a profitable business
How to choose the best investments in 2024
How to find the best car insurance
What happens when you report identity theft?
How to find the best home insurance policy in five common scenarios
What is the best identity theft protection service?
Want to start a business?
How to compare homeowners insurance
Watch out for making money scams
Find the best homeowners insurance in your state
How we ranked the best homeowners insurance companies
What are dividend stocks and why buy them?
Dividends on common stock — like any investment — are never guaranteed. However, dividends are more likely to be paid by well-established companies that no longer need to reinvest as much money back into their business. As a result, stocks that pay dividends can provide a stable and growing income stream.
Dividends are considered an indication of a company's financial well-being. Once a company establishes or raises a dividend, investors expect it to be maintained, even in tough times. Investors often devalue a stock if they think the dividend will be reduced, which lowers the share price.
According to research from Fidelity, during periods of inflation, “stocks that increased their dividends the most outperformed the broad market, on average."
The most reliable American companies have a record of growing dividends — with no cuts — for decades. Examples of companies that pay dividends include Exxon, Target, IBM, Sherwin-Williams Co., and Johnson & Johnson. An elite list of S&P 500 stock companies called the dividend aristocrats have increased their dividend every year for at least 25 years. By comparison, high-growth companies, such as tech or biotech companies, rarely pay dividends because they need to reinvest profits into expanding that growth.
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Dividend vs. growth stocks
Learn more about the difference between dividend and growth stocks, and what they add to your portfolio.
How are dividends paid out?
Imagine you own 30 shares in a company and that company pays $2 in annual cash dividends. You will receive $60 per year. Here’s how it works.
A company earns profits.
The company’s board of directors approve a plan to share those profits in the form of a dividend. A dividend is paid per share of stock. U.S. companies usually pay dividends quarterly, monthly or semiannually.
The company announces when the dividend will be paid, the amount and the ex-dividend date. Investors must have bought the stock at least two days before the official date of a dividend payment (the "date of record") in order to receive that payment.
The company pays out the dividend to shareholders.
The ex-dividend date is extremely important to investors: Investors must own the stock by that date to receive the dividend. Investors who purchase the stock after the ex-dividend date will not be eligible to receive the dividend. Investors who sell the stock after the ex-dividend date are still entitled to receive the dividend, because they owned the shares as of the ex-dividend date.
6 types of dividends
Usually, dividends are paid out on a company’s common stock. There are several types of dividends a company can choose to pay out to its shareholders.
1. Cash dividends
The most common type of dividend. Companies generally pay these in cash directly into the shareholder's brokerage account.
2. Stock dividends
Instead of paying cash, companies can also pay investors with additional shares of stock.
3. Dividend reinvestment programs (DRIPs)
Investors in DRIPs are able to reinvest any dividends received back into the company's stock, often at a discount. DRIPs typically aren't mandatory; investors can choose to receive the dividend in cash instead.
4. Special dividends
These dividends pay out on all shares of a company’s common stock, but don’t recur like regular dividends. A company often issues a special dividend to distribute profits that have accumulated over several years and for which it has no immediate need.
5. Preferred dividends
Payouts issued to owners of preferred stock. Preferred stock is a type of stock that functions less like a stock and more like a bond. Dividends are usually paid quarterly, but unlike dividends on common stock, dividends on preferred stock are generally fixed.
6. Dividend funds
Investors who don't want to research and pick individual dividend stocks to invest in might be interested in dividend mutual funds and dividend exchange-traded funds (ETFs). These funds are available to a range of budgets, hold many dividend stocks within one investment and distribute dividends to investors from those holdings.
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How to evaluate dividends
An investor can use different methods to learn more about a company's dividend and compare it to similar companies.
As mentioned above, companies that can increase dividends year after year are sought after. The dividend per share calculation shows the amount of dividends distributed by the company for each share of stock during a certain time period. Keeping tabs on a company’s DPS allows an investor to see which companies are able to grow their dividends over time.
Dividend yield
Financial websites or online brokers will report a company’s dividend yield, which is a measure of the company’s annual dividend divided by the stock price on a certain date.
The dividend yield evens the playing field and allows for a more accurate comparison of dividend stocks: A $10 stock paying $0.10 quarterly ($0.40 per share annually) has the same yield as a $100 stock paying $1 quarterly ($4 annually). The yield is 4% in both cases.
Yield and stock price are inversely related: When one goes up, the other goes down. So, there are two ways for a stock’s dividend yield to go up:
The company could raise its dividend. A $100 stock with a $4 dividend might see a 10% increase in its dividend, raising the annual payout to $4.40 per share. If the stock price doesn’t change, the yield becomes 4.4%.
The stock price could go down while the dividend remains unchanged. That $100 stock with a $4 dividend might decline to $90 per share. With that same $4 dividend, the yield would become just over 4.4%.
Dividend payout ratio
Advisors say one of the quickest ways to measure a dividend’s safety is to check its payout ratio, or the portion of its net income that goes toward dividend payments. If a company pays out 100% or more of its income, the dividend could be in trouble. During tougher times, earnings might dip too low to cover dividends. Like a stock's dividend yield, the company's payout ratio will be listed on financial or online broker websites.
🤓Nerdy Tip
Be sure to check the stock's dividend payout ratio, or the portion of a company’s net income that goes toward dividend payments. Payout ratios are one measure of dividend health, and they are listed on financial or online broker websites.
Are dividends taxed?
All types of dividends are taxable. Dividends paid by U.S.-based or U.S.-traded companies to shareholders who have owned the stock for at least 60 days are called qualified dividends, and are subject to capital gains tax rates. All other dividends are subject to ordinary income tax rates.
Next steps
Neither the author nor editor held positions in the aforementioned investments at the time of publication.