Definition of Dividend

What is a dividend? What is the definition of a dividend? Why do some companies pay out dividends, while other companies do not?

A dividend is some form of a taxable benefit that is paid out to the shareholder of a company.

Dividends usually take the form of:

-cash dividend (the most common)
-stock dividend

Many companies pay out their dividends on a regular basis (usually quarterly).

-- Finance term definition - Dividend --Why would a company pay out a dividend?

A company that pays out a dividend is usually a long-established company that generates profits on a very consistent basis.

Dividends are paid out in order to encourage shareholders to continue holding shares in the company, as well as building sustained, long-term shareholder value.

Dividends are paid out of current or retained earnings.

Companies are not required to pay out dividends - many companies do not.

Companies are also not required to continue paying out dividends if they have done so in the past, but cutting or eliminating a dividend is usually a sign of poor health for a company.

-- Articles That Mention Dividend:

Why Do Companies Buy Back Shares?

Warren Buffett: 20 More Years of Outperforming The S&P 500 Since Everybody Wrote Him Off

Should Companies That Paid Billions To Buy Back Shares Be Entitled To Government Bailouts?

How Good of a Stock and Options Trader is Nancy Pelosi?

A Look at Warren Buffett's Annual Returns