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StockCram is not a broker-dealer, investment adviser, or financial institution. All content is for educational and informational purposes only and should not be construed as personalized investment advice. Consult a qualified financial professional before making investment decisions. Past performance does not guarantee future results.Simple Definition
Money a company pays you just for owning their stock.
Why It Matters
Dividends let you get paid while you sleep. Coca-Cola has paid dividends every quarter since 1920 - through the Great Depression, world wars, and every recession since. For retirees, dividends can replace a paycheck. For everyone else, reinvesting dividends supercharges compound growth.
Key Points
- Not all stocks pay dividends - growth companies like Amazon often reinvest instead
- Dividend yield tells you what percentage return you get (typically 1-5%)
- You can set up automatic reinvestment (DRIP) to buy more shares with your dividends
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Money a company pays you just for owning their stock. Dividends let you get paid while you sleep. Coca-Cola has paid dividends every quarter since 1920 - through the Great Depression, world wars, and every recession since.
Dividends let you get paid while you sleep. Coca-Cola has paid dividends every quarter since 1920 - through the Great Depression, world wars, and every recession since. For retirees, dividends can replace a paycheck. For everyone else, reinvesting dividends supercharges compound growth.
Not all stocks pay dividends - growth companies like Amazon often reinvest instead
Dividend yield tells you what percentage return you get (typically 1-5%)
You can set up automatic reinvestment (DRIP) to buy more shares with your dividends