Dividend
Definition
A distribution of a company's earnings to shareholders, typically paid quarterly. Dividends provide regular income and are a sign of financial health. The average S&P 500 dividend yield is around 1.5-2%.
Related Terms
Dividend Aristocrat
An S&P 500 company that has increased its dividend payout for at least 25 consecutive years. As of 2026, there are about 65 Dividend Aristocrats, including Procter & Gamble, Coca-Cola, and Johnson & Johnson.
Dividend Yield
The annual dividend payment divided by the stock price, expressed as a percentage. A stock trading at $100 with a $3 annual dividend has a 3% dividend yield. Higher yields can indicate value or risk.
DRIP
Dividend Reinvestment Plan — a program that automatically reinvests cash dividends into additional shares of the underlying stock. DRIPs leverage compound growth and are available through most brokerages.
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