Dividends

A dividend is a per-share cash payment from profits. Key dates: declaration, ex-dividend date (buy before it to receive the payment), and payment date. On the ex-date the price drops by roughly the dividend — it's a transfer, not free money.

Dividend yield = annual dividend / price. A very high yield is often a warning (price collapsed or the payout is unsustainable — check the payout ratio against earnings). Companies that grow dividends for decades tend to be durable, disciplined businesses; reinvested dividends have historically contributed a major fraction of total equity returns.