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Dividend investing, explained in plain English. Short, self-contained reads — start anywhere, or begin with the full guide below.
Start here: The Dividend Investing Guide
The one-page primer that ties it all together — what a dividend is, the four dates that govern every payment, how yield and frequency interact, and how to judge whether a payout can last.
Read the guide →- A dividend is a policy decision, not a promise; treat any payout as revocable.
- The ex-dividend date, not the pay date, determines who receives the next payment.
- Always annualize by frequency (Q=4, M=12, S=2, A=1, W=52) before comparing two stocks.
- A very high yield usually signals a falling price or a payout at risk, not free money.
Explainers
What Is a Dividend?
A dividend is cash (or, less often, additional shares) that a company pays out of its profits to the people who own its stock. It is the most direct way a business shares its success with shareholders.
Read →Cash Dividends Explained
A cash dividend is the most common form of dividend: a direct cash payment per share, deposited into your brokerage account on the pay date.
Read →Reading a Dividend History
A dividend history is the record of every payment a company has made: the amounts, the dates, and the changes over time. Read correctly, it is one of the most honest documents a dividend investor has.
Read →Dividend Yield Traps to Avoid
A yield trap is a stock whose dividend yield looks attractive precisely because something is wrong. The high number draws income investors in right before a cut wipes out both the payment and the principal.
Read →High-Yield Stocks Paying Monthly
Most companies pay dividends quarterly, but a subset pays every month. Monthly payers appeal to investors who want their income to arrive on the same cadence as their bills.
Read →The Dividend Aristocrats
Dividend Aristocrats are large, established companies that have raised their dividend every year for at least twenty-five consecutive years. The track record is the whole point.
Read →Understanding the Payout Ratio
The payout ratio is the share of a company's earnings paid out as dividends. It is the single best quick gauge of whether a dividend can be sustained.
Read →What Is a Dividend Reinvestment Plan (DRIP)?
A dividend reinvestment plan, or DRIP, automatically uses your cash dividends to buy more shares of the same stock instead of paying you in cash. It is the simplest way to compound dividend income.
Read →The Ex-Dividend Date, Explained
The ex-dividend date is the single date that decides who receives a declared dividend: buy the shares before it and the payment is yours; buy on or after it and the payment goes to the seller.
Read →The Free-Cash-Flow Payout Ratio
Earnings are an accounting opinion; cash is a fact. Comparing the dividend to free cash flow — operating cash minus capital spending — asks whether the actual cash the business generates covers the checks it writes.
Read →How REIT Dividends Are Covered (FFO and AFFO)
REIT payouts cannot be judged by the ordinary payout ratio: depreciation depresses REIT earnings without touching cash, so the sector's coverage measures are funds from operations (FFO) and its adjusted version (AFFO).
Read →How BDC Dividends Are Covered (Net Investment Income)
Business development companies pay some of the market's highest regular yields, and the measure that tells you whether those payouts hold is net investment income (NII) — not earnings per share.
Read →Dividend CAGR: Measuring Payout Growth Properly
Dividend CAGR — compound annual growth rate — turns a payout history into a single comparable number: the steady yearly growth rate that would take the dividend from where it was to where it is.
Read →How ETF Distributions Work
An ETF does not decide a dividend the way a company does — it passes through what its holdings generate. That single difference explains why fund distributions vary, what they contain, and how to judge them.
Read →Covered-Call ETF Distributions, Explained
Covered-call ETFs generate their double-digit distributions by selling call options against their holdings — converting potential upside into current income. The yield is real; the trade-off is structural.
Read →Qualified vs Ordinary Dividends: The General Rules
U.S. tax law treats dividends in two classes: qualified dividends, taxed at the lower long-term capital-gains rates, and ordinary (non-qualified) dividends, taxed as regular income. This page covers the general concepts only — it is education, not tax advice.
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