What is the dividend and how it benefits the investor

According to the dictionary, dividends are the proportion of the amount of the company "distributed to its shareholders" from its proceeds. The company divides the annual net profit by the total number of shares and dividends to the shareholders.

Suppose your annual dividend is $ 1 per share. You can get a check for $ 1 per share per year, or $ 0.25 per quarter. On a per-share basis, this amount seems insignificant, but if you hold a large number of shares, the amount becomes quite attractive and attractive. Those who buy thousands of shares when they issue a corporate IPO receive a lot of money from the dividend. It becomes a substantial part of your regular income, and as your company grows, your stock holds value.

The most successful companies, especially blue-chip companies, pay dividends on a regular basis to shareholders. In fact, dividend payments become their unique sales prerequisites – USP. Quite a number of stock investors choose to invest in certain companies because they pay dividends quarterly or year after year. Blue-chip companies such as Coca-Cola, Wal-Mart, and McDonalds are all on a yearly or quarterly basis.