Dividend

A dividend is a payment that a company makes to its shareholders—basically, a slice of the company's profits shared with people who own stock in it. Companies aren't required to pay dividends, but many established, profitable ones do as a way to reward investors for holding their shares. You'll see dividends listed in a company's financial reports, and they're one reason people buy stocks beyond hoping the 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 usually paid quarterly (four times a year) and can be reinvested to buy more shares or taken as cash.