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Rafi asked in Business & FinanceInvesting · 2 months ago

What is dividend stocks?

What is dividend stocks?

What is dividend stocks???

what about it is different from regular stocks?

I googled it but I still don't get it...

Would you explain it in easy way?

7 Answers

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  • 2 months ago
    Favorite Answer

    A stock dividend is a dividend payment to shareholders that is made in shares rather than as cash. The stock dividend has the advantage of rewarding shareholders without reducing the company's cash balance, although it can dilute earnings per share.

    These stock distributions are generally made as fractions paid per existing share. For example, a company might issue a stock dividend of 5%, which will require it to issue 0.05 shares for every share owned by existing shareholders, so the owner of 100 shares would receive five additional shares.

  • ?
    Lv 6
    1 month ago

    Dividend stocks are companies that pay out regular dividends. Dividend stocks are usually well-established companies with a track record of distributing earnings back to shareholders. Dividend Stocks. Guide to Dividend Investing.

  • Anonymous
    1 month ago

    Dividend stocks pay a portion of their profits as cash distributions to their shareholders. Sometimes the amount is fixed and sometimes it is tied to actual profits. Some companies, known as REITS and BDC's, are required by law to pay 90% of their profits back to shareholders in exchange for special tax considerations. The stocks can pay out really high dividends but the stock value usually doesn't change much or may actually decline. A few pay monthly dividends and others pay quarterly. They can be great over the long term if the dividends are invested back into purchasing additional shares. Holding them in an IRA can allow very good growth over time when the dividends are tax deferred or exempt if you have them in a Roth IRA.

  • Anonymous
    1 month ago

    Dividend stocks pay you money usually every quarter but some every 6 or 12 months.  Every dividend paid reduces the value of the company by the amount of the dividend when it goes ex dividend.

    Regular stocks pay you nothing but presumably go up in value. That is the hope anyway.

    Aggressive growth investors usually could not care less about dividends. People who want regular income care more about the regular income stream.

    When I was young, dividends were something I paid almost no attention to.  Now that I am older, I care about dividends more and I see the stocks as perhaps a little less risky overall.

    I bought one about a month ago for $59. Then it paid me a 62 cent dividend. But the stock has DECLINED $1.42. So I got .62 but lost $1.42 for an overall loss of 80 cents.

    The dividend is not free. It comes out of the value of your stock.

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  • fcas80
    Lv 7
    1 month ago

    When a company is profitable, they have a choice  of what to do with the profits.  Some companies pay a high portion of their profit to investors as dividends, while other companies hold onto a high portion of their profit in order to have funds for company operations.

    As an investor, if you need income each year from your investment, buy dividend stocks.  Or, if you don't need income each year but would rather see the value of your stock grow, buy "regular" stocks.

  • kswck2
    Lv 7
    2 months ago

    IN the course of 2 minutes, you want to know about an app for trading forex AND what dividend stocks are? Both are easily determined IF you do your OWN homework, which apparently you are not willing to do. 

    Stay out of the Market. 

  • ?
    Lv 7
    2 months ago

    A dividend stock is a company whose shares whose main attraction is that they pay a high dividend, for example 4%, 5%, etc. Typically these are utility companies, telecommunication companies, real estate trusts and banks that have low growth prospects but reliable earnings that they can pay out as dividends to shareholders.

    It is just a way of categorising the shares, e.g. like calling a company a value stock, a growth stock, a tech stock, a mining stock.

    It is nothing to do with paying dividends via shares rather than cash. 

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