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Dividend

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A company can make a profit. When this happens, it can share that money. This shared money is called a dividend.

Microcosm of London Plate 101 - South Sea House, Dividend Hall (tone)
Microcosm of London Plate 101 - South Sea House, Dividend Hall (tone)

Companies give dividends to people who own shares. The amount depends on how many shares a person has. If a company has extra profit, it might pay a dividend. If it does not pay it out, it keeps the money to grow the business. These kept profits are called retained earnings.

Most companies pay with cash. They might send money through a bank.

International dividend frequencies
International dividend frequencies

Some companies use other ways to pay. They might give more shares to the owners. This is called a stock dividend. Other times, they might give assets like property.

Companies pay dividends on different schedules. Some pay every month. Others pay once a year. The timing can change based on the country. For example, companies in the US often pay every three months. In Germany, they often pay once a year. Dividends can help owners feel good about their investment. However, a company does not have to pay them every time.

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