What are dividends?

Asked 3 years ago

Hi, I keep reading about dividends being paid out with ETF stock investments/ shareholding. I'm assuming they're good and not bad because they talk about being paid. What do dividends mean, and how do I get them?

Dividends Beginner investor

Andrew Moran

Thursday, August 12, 2021

A dividend is a distribution of a security's earnings, surplus, or profits that is paid out to shareholders. They are essentially a reward that a publicly-listed company will pay to investors who maintain an investment in the firm.
Many companies offer dividends (monthly or quarterly) to attract traders and keep their shareholders happy.
All you need to do is buy a stock or exchange-traded fund (ETF) that offers a dividend.
This is achieved by looking for the investment's dividend yield. Moreover, be sure to check the ex-dividend date (or reinvestment date): This is the period you need to buy or hold the stock to be eligible for a dividend.
So, yes, dividends are great!