What’s a Dividend?

A company earns revenues and pays expenses. If revenues are greater than expenses, the company has made a profit. The company then has several choices about how to best use their profits (assumint the company is publicly traded):

Grow the Company
Buyback Stock
Pay Dividends

This article covers the purpose of dividends, what types of companies are more likely to pay dividends and what types of investors are more inclined to purchase dividend-paying stocks.

To view the complete article, click here.

Tags: Buyback Stock, Dividend, Profits