What is dividend?

"Dividend" is the portion of the profit paid out to the shareholders of a company as a reward for their investment. In exchange for providing risk-bearing capital (equity), shareholders receive both voting rights and the right to a dividend.

The dividend is paid out from the remaining profit of the company after the deduction of all liabilities. A portion of this profit is usually not distributed, but added to the general reserve or used for new investments.

A dividend can be paid out in various forms, such as a cash dividend (money) or as shares (stock dividend). Fast-growing companies will often distribute little or no dividend, as they need their resources for further growth. The dividend payout ratio indicates which portion of the total profit is distributed to shareholders.

Furthermore, there are special forms of dividend, such as the super-dividend (a one-off high distribution) and loyalty dividend (extra distribution for loyal shareholders). The dividend yield is the dividend as a percentage of the stock price and is an important measure for investors looking for stable income.

The actual distribution of the dividend usually takes place in instalments, often with an interim dividend and a final dividend in Europe. The dividend is paid out on the ex-dividend date, and the share price usually falls by the amount of the dividend on that day.

In short, a dividend is an important form of reward for shareholders and can have a significant effect on the attractiveness of a share for investors.