What Is a Dividend?

A dividend is a cash return in which a company distributes a portion of the profit it has earned to the shareholders who hold its stock.

Relationship to dividend yield

Investors typically look not only at the dividend amount itself but also at "dividend yield," which shows how much dividend income is received relative to the share price. The level and sustainability of dividends depend on a company's performance and dividend policy, and dividends can increase, decrease, or be suspended entirely.

What to keep in mind

A dividend is a representative example of income that can be earned simply by holding an asset (income gain), but the amount received is subject to tax. Because past dividend performance does not guarantee future dividends, it is worth checking business trends and the sustainability of the dividend policy as well.

This article is provided for general informational purposes only and does not recommend or solicit the purchase or sale of any specific investment method or security. Final investment decisions are your own responsibility.

Frequently Asked Questions

Am I guaranteed to receive a dividend?
No. Dividend amounts fluctuate based on a company's performance and management policy, and a company may pay no dividend at all. A track record of past dividends does not guarantee that dividends at the same level will continue in the future.
What do I need to do to receive a dividend?
You need to hold the shares as of the record date set by each company. The ex-dividend date falls two business days before the record date, and if you purchase shares on or after that date, you will not receive the dividend for that period.