Dividends
Cash payments companies send shareholders from profits, usually quarterly. It is getting paid to own the stock, on top of any price gains.
By Findley's Finance · Last reviewed: September 2026
Why it matters
Dividends turn stocks into income, which is why retirees love them — but a high dividend is not free money. The stock price drops by the payout amount on the ex-dividend date; you are just choosing cash over reinvestment. Chasing the highest yields is a classic trap: a 9% yield often means the market expects the dividend to be cut.
Concrete example
A $100 stock with a 3% dividend yield pays $3 per share each year — 100 shares sends you $300.