Dividend
Cash a company pays shareholders from its profits.
A dividend is a payment a company makes to its shareholders, usually every quarter, as a way of sharing profits.
How it works
If a company pays $0.50 per share each quarter and you own 100 shares, you receive $50 every three months. Funds that hold dividend-paying companies pass those payments on to you.
Not every company pays dividends. Many fast-growing companies reinvest their profits instead.
Reinvest or spend
Reinvesting dividends buys more shares, which pay more dividends, which buy more shares. Over decades this is a large part of total stock market returns.