Knowledge is power. We empower our clients.

Get Started Now
<< Back to Financial Glossary

What is a Dividend?

A dividend is a payment to shareholders made by a company from its profits or cash reserves. In fact, the word comes from the Latin, dividendum, meaning thing to be divided.

Dividends can be received either in cash or shares or stock, paid quarterly, semi-annually, annually or sometimes monthly. However, dividends are dependent on the profits of a company and therefore, are not guaranteed. Companies can change their dividend policy at any time, with the board of directors deciding the level of earnings to be paid out.

Not all companies pay dividends. In general, dividend-paying companies tend to be large and generate a high level of cash. Smaller companies or businesses focused on growth may not pay dividends, as they use their profits to reinvest in the business.

Dividend income has long been an important component of investors’ returns. Since 1926, dividends have made up approximately one-third of the total return of the S&P 500 Index, according to S&P Dow Jones Indices.

Jemma Everyday Wisdom: For long-term investors, dividends—especially when reinvested—play a significant role in an investor’s portfolio. Therefore, you don’t need to own one dividend-paying company to benefit. Rather, there are investments, including mutual funds, that help you access the power of dividends.

Log In to Your Existing Account Get Started Now

Need assistance? Call 855.662.2121 or email info@jemmafinancial.com

You are now leaving Jemma Financial

Yes, I would like to leave No, I would like to stay

Important Notice

You are now leaving the Jemma Financial Services website and will be entering the Charles Schwab & Co., Inc. (“Schwab”) website.

Schwab is a registered broker-dealer, and is not affiliated with Jemma Financial Services or any advisor(s) whose name(s) appear(s) on this website. Jemma Financial Services is/are independently owned and operated. [Schwab neither endorses nor recommends {Name(s) of Investment Management Firm(s)}, unless you have been referred to us through the Schwab Advisor Network®. (This bracketed language is for use by Schwab Advisor Network members only.)] Regardless of any referral or recommendation, Schwab does not endorse or recommend the investment strategy of any advisor. Schwab has agreements with “Name(s) of Firm(s)” under which Schwab provides Jemma Financial Services with services related to your account. Schwab does not review the Jemma Financial Services website(s), and makes no representation regarding information contained in the Jemma Financial Services website, which should not be considered to be either a recommendation by Schwab or a solicitation of any offer to purchase or sell any securities.

IMPORTANT NOTICE

You are now leaving the Jemma Investment Advisors, LLC Website and will be entering the Charles Schwab & Co., Inc. ("Schwab") Website. Schwab is a registered broker-dealer, and is not affiliated with Jemma Investment Advisors, LLC, or any advisor(s) whose name(s) appears on this Website. Jemma Investment Advisors, LLC is independently owned and operated. Schwab neither endorses nor recommends Jemma Investment Advisors, LLC. Regardless of any referral or recommendation, Schwab does not endorse or recommend the investment strategy of any advisor. Schwab has agreements with Jemma Investment Advisors, LLC under which Schwab provides Jemma Investment Advisors, LLC with services related to your account. Schwab does not review the Jemma Investment Advisors, LLC Website, and makes no representation regarding the content of the Website. The information contained in the Jemma Investment Advisors, LLC Website should not be considered to be either a recommendation by Schwab or a solicitation of any offer to purchase or sell any securities.

Continue to Schwab

This will close in 0 seconds