A dividend is a payment to a shareholder when a company shares its profits.

When a business makes a profit, they can choose to pay dividends to shareholders. If you own shares, you get a certain amount of the profit. These payments to shareholders that come out of the profits are dividends.

Your share of the dividends is in proportion to how many shares you own.

Dividends are almost always paid out in cash payments. Occasionally additional shares of stock are issued, and far less common than cash dividend payments.

These payments usually occur 4 times a year (at the end of every quarter), can be on a different schedule.