Introduction to Dividends

Dividends are a portion of company earnings regularly paid to shareholders, paid as some fixed amount per share price.

Dividends are attractive to many investors because they are seen as steady streams of income from low risk investments.

Under perfect market conditions, stockholders would ultimately be indifferent between returns from dividends or returns from capital gains.

Low dividend payouts can be interpreted in a number of ways, including: as a leading indicator of future growth or a sign of instability.

High dividend yields are attractive to investors who desire current income and stability since established firms often offer such stocks.