Dividend

A dividend is a payment that a company makes to its shareholders—basically, a slice of the company's profits distributed to people who own stock in it. Companies aren't required to pay dividends, but many mature, profitable ones do as a way to reward investors for holding their shares. You'll see dividends mentioned a lot when researching stocks, especially if you're looking for steady income rather than just hoping the stock price goes up. For example, if you own 100 shares of a company that pays a $2 annual dividend per share, you'd receive $200 per year. Dividends are typically paid quarterly (four times a year), though the amount and frequency vary by company.