Dividends: What are they? Definition | Hapinary Dictionary

Dicionário Hapinary

9.11.2024 1:01 AM

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Dividends: Definition and Meaning

Dividends are distributions of profits that a corporation decides to share with its shareholders.

Characteristics of Dividends

  • Being a shareholder gives you the economic right to receive dividends, at least in general terms;
  • When a company has profits or surplus cash, it decides to distribute a percentage according to its dividend policy;
  • Dividends can be paid based on a fixed, variable, or mixed rate;
  • They may be paid at a specific period or the company may choose not to pay dividends and use all resources for reinvestment to improve the business;
  • If a dividend or profit is not distributed, it remains within the company to be used for improving its operations.

How to Determine How Much Dividends a Stock Pays?

To determine how much dividends a stock will yield, there is a formula to calculate the DPS (Dividends Per Share) based on the information provided by the company:

  • Divide the gross dividend by the number of shares,
  • Gross / Number of shares.

The Gross Dividend is the result of the percentage the company shares in its dividend policy.

In conclusion, to know how much money you'll receive in dividends from a stock, you should check the dividend yield (dividend yield) that your company provides in its policy.

Important Disclosure

This article is provided for informational and educational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any securities or investment products. Nothing herein should be construed as investment, financial, tax, or legal advice, nor as a recommendation of any security, investment strategy, or account type.

Hapi Corp. is the parent company of Hapi Securities, LLC, a U.S. SEC-registered broker-dealer and member of FINRA/SIPC. Any discussion of securities or financial products in this article is for general informational purposes only and may not reflect the views of Hapi Securities, LLC.

Investing in securities involves risk, including possible loss of principal. Past performance does not guarantee future results. Securities products are not FDIC-insured and may lose value.

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