Stock market glossary
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Dividend
A dividend is the part of its profits that a company distributes to its shareholders, usually once or several times a year.
Not all companies pay dividends: fast-growing ones often reinvest their profits. The dividend yield is calculated by dividing the annual dividend by the share price. On the ex-dividend date the share price falls by roughly the amount of the dividend.
💡 Investors looking for a regular income often turn to stocks with stable dividends, such as those in energy, banking and utilities.
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