A dividend is a portion of a company’s earnings that is distributed to its shareholders, typically in the form of cash or additional shares.

Dividends are usually issued on a regular basis (quarterly, semi-annually, or annually) and are approved by the company’s board of directors. They represent a way for companies to share profits with investors and are commonly paid by established companies with steady earnings. The amount received depends on the number of shares owned.

While not all companies pay dividends, those that do often signal financial stability and a commitment to returning value to shareholders.

Dividends can be an important source of income for investors.