dividend
noun
, -dənd\
Definition of dividend
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Other Words from dividend
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adjective
Synonyms for dividend
Synonyms
bonus, cumshaw, donative, extra, gratuity, gravy, gravy train, lagniappe, perk, perquisite, throw-in, tip
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Examples of dividend in a Sentence
Recent Examples on the Web
Illustration: Shaumbe Wright/WSJ Corrections & Amplifications Comcast is raising its annual dividend 10% to 84 cents per share. — Benjamin Mullin, WSJ, "Comcast Lifted by Media and Broadband Growth," 23 Jan. 2019 Juul is paying a dividend of $150 per share to its investors as part of the arrangement, according to people close to the deal. — Theodore Schleifer, Recode, "In an extraordinary move, Juul is trying to make peace with its investors and employees by paying them more than $4 billion," 21 Dec. 2018 Bank stocks set the pace Friday after the Federal Reserve approved banks’ plans to increase their dividends and buy back more stock. — David Lazarus, latimes.com, "California Inc.: Will Comcast raise stakes in battle for Fox?," 2 July 2018 The biggest driver of the increase was nonwithholding income tax collections, a volatile type of revenue that involves people making estimated payments on capital gains, dividends, partnerships and interest income. — Gregory S. Schneider, Washington Post, "Virginia posts revenue surplus, but is economic growth or tax strategy?," 12 July 2018 Yet in Mexico, beyond the border region, politicians’ predictions about NAFTA’s dividends have proved less accurate. — The Economist, "Why America and Mexico are destined to grow even closer," 21 June 2018 Including stockholder dividends, Duke Energy's return should be more like a steady 8-10 percent a year, the company is telling investors. — Fox News, "Utilities pivot from power plants to grid work for profits," 24 Aug. 2018 The cash portion of the transaction will come from an $11 billion special dividend that VMware will issue to all its shareholders — $9 billion of which will go to Dell. The transaction would help simplify what has been a complicated stock structure. — New York Times, "Dell to Return to Public Markets With Tracking Stock," 2 July 2018 This early education has paid dividends now that her job demands a camera-ready complexion, no matter the early-morning call times or the shoot locations. — Kate Branch, Vogue, "This Fantastic Beasts 2 Star Has a Serious Knack for K-Beauty," 17 Nov. 2018These example sentences are selected automatically from various online news sources to reflect current usage of the word 'dividend.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
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More Definitions for dividend
dividend
nounFinancial Definition of dividend
What It Is
Dividends represent a distribution of corporate earnings to company shareholders and usually take place in one of two forms -- cash or stock. Each organization's board of directors determines the actual dividend amount that the firm will pay out. Most cash dividends are paid on a quarterly basis. Meanwhile, stock dividends are generally paid at infrequent intervals.
How It Works
When researching a company, it is important to recognize when they pay dividends. However, it is easy to be confused by several different dates a company may specify when informing investors of their dividend structure. You should be aware of the following terms:
Dividend Declaration Date: This is the date on which a company's board of directors declares that a dividend will be paid. The board determines the amount of the dividend, as well as when it is to be paid to shareholders on record.
Dividend Record Date: This is the date on which a company reviews its books to determine its "shareholders of record." Shareholders who hold a particular stock on this date will receive the firm's dividend payment.
Ex-dividend Date: After the Record Date has been determined, the stock exchanges or the National Association of Securities Dealers (NASD) assign the ex-dividend date. The ex-dividend date for stocks is typically two business days prior to the record date. If an investor buys a stock before the ex dividend date, then they will receive the dividend payment. If they purchase the stock on or after the ex-dividend date, then they are not entitled to receive the dividend. On the ex-dividend date, a firm's share price usually declines to reflect the amount of the dividend paid. For example, if a stock is trading at $100 and pays a quarterly dividend of $3 per share, then, all other things being equal, the stock will open on the ex-dividend date at $97.
Why It Matters
Many investors rely on dividend payments as a source of income. Say you are retired and hold a significant proportion of your investment portfolio in stocks. Even if share prices of your stocks increase over time, you will be unable to realize these capital gains until you sell your shares. However, if these stocks pay dividends, you will receive a check in the mail (usually four times a year) for your share of the companies' profits.
Dividend payments are very important to the relationship between company and investor. In recent history we saw General Motors cut their long-running dividend in an effort to avoid bankruptcy during the financial crisis that started in 2008. This enraged many former GM employees who lived on dividend payments from the corporation. Additionally, there have been cases of a company's stock price falling amid talks of cutting dividends, showing that a stable dividend payout is integral to a company's financial well-being.
Source: Investing Answers
cumulative dividend
nounFinancial Definition of cumulative dividend
What It Is
A cumulative dividend is a dividend, usually on preferred shares, that must be paid before any other dividends on any of the issuer's other securities. Preferred stock that does not carry a cumulative dividend is referred to as "straight preferred."
How It Works
Let's assume Company XYZ issues some preferred stock with a $1-per-share cumulative quarterly dividend. Company XYZ also has some common stock outstanding on which the company paid a $0.50-per-share dividend last quarter.
Now let's assume a recession has taken a toll on Company XYZ's cash flow, and the board has decided to suspend dividend payments. Because the preferred shares have a cumulative dividend, once Company XYZ decides to resume making dividend distributions, it must first "catch up" on any missed dividends payments to the preferred shareholders (those outstanding the longest are paid first). Then it can resume making dividend payments to the holders of its common stock. It must do this even if it does not completely suspend the preferred dividends; reducing them creates a similar obligation.
Why It Matters
Preferred shares that have cumulative dividends often have slightly higher rates of return than straight preferred because cumulative preferred carries the added risk of possibly not receiving regularly scheduled dividend payments.
Source: Investing Answers
dividend
noun
English Language Learners Definition of dividend
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