What are stock dividends?

Stock dividends are payments a company makes from its overall profits to shareholders as a reward for their investment. Dividends are most commonly paid to shareholders as cash dividends but are occasionally paid out as additional shares of stock.

What is a dividend & how do they work?

NerdWallet What Is a Dividend and How Do They Work? Dividends are regular payments of profit made to investors who own a company's stock. Dividends can be paid in cash or reinvested back into the stock.

Are dividends a cash or a stock dividend?

In the U.S., most dividends are cash dividends, which are cash payments made on a per-share basis to investors. For instance, if a company pays a dividend of 20 cents per share, an investor with 100 shares would receive $20 in cash. Stock dividends are a percentage increase in the number of shares owned.

How much does a stock pay a dividend?

A dividend-paying stock generally pays 2% to 5% annually, whether in cash or shares. When you look at a stock listing online, check the “dividend yield” line to determine what the company is paying out. A stock dividend is a payment to shareholders made in additional shares instead of cash.