dividend

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noun div·i·dend \ ˈdi-və-ˌdend , -dənd \

Updated on: 26 Jul 2017

Definition of dividend

1 :an individual share of something distributed: such as

a :a share in a pro rata distribution (as of profits) to stockholders

Profits are distributed to shareholders as dividends.

b :a share of surplus allocated to a policyholder in a participating insurance policy

2 a :a resultant return or reward

our efforts are finally paying dividends

b :bonus

3 a mathematics :a number to be divided

b :a sum or fund to be divided and distributed

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dividendless

play \-ləs\ adjective

See dividend defined for English-language learners

See dividend defined for kids

Examples of dividend in a Sentence

Profits are distributed to shareholders as dividends.
the reward money was an unexpected dividend for our good deed

Recent Examples of dividend from the Web

This decision, bypassing the skin care section to sell an over-the-counter medicine at the pharmacy counter, paid dividends.

— william thornton, AL.com, "John Bryan celebrates 20 years of Skin Repair Lotion," 25 Aug. 2017
Overview Even the hype of moving from St. Louis to Los Angeles didn’t pay dividends in the win column last year.

— david humphrey, star-telegram, "A team-by-team preview of the 2017 NFL season," 25 Aug. 2017
Wenger was running out of ideas and introduced Ramsey and Giroud in a double switch was about to pay dividends.

— SI.com, "Arsenal 4-3 Leicester: Super Subs Giroud & Ramsey Secure Incredible Opening Night Win Over Foxes," 11 Aug. 2017
These companies typically are leaders in their respective industries; their stocks have above-average price-to-earnings ratios and may pay low (or no) dividends.

— anna-louise jackson, sandiegouniontribune.com, "Value vs. Growth: 2 investing styles explained," 6 Aug. 2017
The IMF estimates that reform of SOEs could bring a $1trn economic dividend over the course of a decade.

— The Economist, "Unnatural selectionChina’s state enterprises are not retreating but advancing," 20 July 2017
High-dividend stocks like real estate companies and utilities also posted big gains following a drop in bond yields.

— alex veiga, Philly.com, "New highs on good news," 15 July 2017
With a recent price-to-earnings (P/E) ratio in the midteens and a growing dividend that recently yielded 2.1 percent, Tractor Supply is worth considering for your portfolio.

— seattle times staff, The Seattle Times, "The Motley Fool: Useful tips on investing," 15 July 2017
Apple’s decision in 2012 to begin paying dividends didn’t satiate shareholders—

— mihir a. desai, The Atlantic, "Capitalism the Apple Way vs. Capitalism the Google Way," 10 July 2017

These 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.

Origin and Etymology of dividend

Middle English divident, from Latin dividendus, gerundive of dividere — see ¹divide

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First Known Use: 15th century

See Words from the same year

dividend Synonyms

Synonyms

cumshaw, bonus, donative, extra, gratuity, gravy, gravy train, lagniappe, perk, perquisite, throw-in, tip

Related Words

pension; bestowal, presentation; benefaction, beneficence, benevolence, bounty, charity, generosity, largesse (also largess), philanthropy; contribution, donation, gift, offering, present; grant, subsidy; boon, manna, windfall; favor, freebie (or freebee), giveaway, premium; award, prize, reward; fringe benefit, icing

Other Economics Terms

actuary, compound interest, globalization, indemnity, portfolio, rentier, stagflation, usurer

Financial Definition of DIVIDEND

dividend

noun

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 Defined for English Language Learners

dividend

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noun

Definition of dividend for English Language Learners

finance : an amount of a company's profits that the company pays to people who own stock in the company
: an advantage or benefit that you get because of something you have done
mathematics : a number that is being divided by another number

DIVIDEND Defined for Kids

dividend

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noun div·i·dend \ ˈdi-və-ˌdend \

Definition of dividend for Students

1 :a number to be divided by another number

2 :an amount of a company's profits that is paid to the owners of its stock

Law Dictionary

dividend

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noun div·i·dend \ ˈdi-və-ˌdend \

legal Definition of dividend

1 :the part of corporate net earnings distributed usually periodically (as quarterly) to stockholders in the form of cash, additional shares, or property either as a set amount per share or a percentage of par value

— constructive dividend

:a benefit (as unreasonable compensation or use of corporate property) or transfer of funds from a corporation to a shareholder that is interpreted by a taxing authority as a dividend

— cumulative dividend

:a dividend distributed to preferred stockholders that is added to and paid with the next payment or future payments if not paid when due

— extraordinary dividend

:a dividend declared in addition to a regular dividend because of unanticipated profits or a nonrecurring increase of revenue

2 :a share of the surplus earnings of a mutual insurance company paid to policyholders either in the form of cash disbursements or through reduction of premiums

3 :a payment disbursed to investors from the income of a mutual fund