Dividends are the payments received by the shareholders from the corporation. It represents the earning on their stock subscription as declared by the Board of Directors. It may be in a form of cash, property or stock dividends.
Dividend investing is a way of earning passive income from companies that distribute their unrestricted retained earnings among its shareholders. There are companies that regularly pay out dividends either monthly, quarterly or annually.
Dividends offer long term stability to your investment. For as long as the company earns well, you are assure that the Board will declare dividends save in cases when the profit will be reserved for business expansion and payment of debts.
The moment you acquire shares of stock that offer dividends, you will have less worries about the fluctuation of stock in the market. Dividends are good sources of earning notwithstanding the plummeting or even the flat price of stocks. This cash flow can be guaranteed by determining first the stocks that yield high dividends.
Dividends likewise provide steady income. For as long as your subscription to capital stock is active and not delinquent, you are guaranteed of your income. Unlike in other investments, when you invest dividends you don’t have to wait for couple of years to realize your profit because the distribution of profit is done on a regularly basis.
The steady income does not mean that you will receive same amount of profit all throughout your investment. Of course, your dividend will grow just like any investment. The increase in dividends depends on how much the company increases its earnings.
The investment does not need complicated management. All you have to do is wait until the Board of Directors declares dividends. You don’t need to worry about your portfolio or any money management tools.
In your brokerage account, you will see the actual dividends received. Other equity will show you statement of account duly certified by accountants. However, this is open to various manipulation and fraudulent machination. In your dividends investment there will be no occasion of giving you false statement pertaining to your income.