Dividend
A cash or share payment a company makes to its shareholders out of profits or reserves, usually quarterly.
A dividend is a payment a company makes to its shareholders, usually in cash and most often quarterly in the US. The board declares the amount, the record date and the payment date. A dividend can be a fixed amount per share or change over time.
On our site, dividends are shown as the annual amount per share and as a yield, the annual dividend divided by the share price. Check the payout ratio, the dividend as a share of earnings or free cash flow, to judge whether it is sustainable.
Traders care because dividend income matters to some holders, and a dividend cut is often read as a strong negative signal.
Worked example (illustrative numbers, not real data): a company pays 0.50 dollars a quarter, or 2.00 a year, and its shares trade at 50 dollars. The yield is 4.0 percent. If earnings per share are 4.00, the payout ratio is 50 percent.