Finance
How do dividends work?
A dividend is a share of a company's profit paid out to its shareholders, usually as cash. If you own stock in a dividend-paying company, you receive regular payments — a way to earn income from investments without selling them.
See it in motion.
Watch a 2-minute animated lesson that shows exactly how dividends works.
Step by step
- 1Dividends are profit payments to shareholders.
- 2They're often paid quarterly, as cash per share.
- 3More shares means a larger total payout.
- 4Not all companies pay them — many reinvest profits instead.
Frequently asked questions
- How do dividends work?
- A company shares part of its profit with shareholders, paying a set amount per share you own.
- How often are dividends paid?
- Commonly every quarter, though some companies pay monthly, annually, or not at all.
- Why don't all stocks pay dividends?
- Many growth companies reinvest profits to expand instead of paying them out to shareholders.