dividend

noun
div·​i·​dend | \ ˈdi-və-ˌdend How to pronounce dividend (audio) , -dənd \

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
2a : a resultant return or reward our efforts are finally paying dividends
b : bonus
3a mathematics : a number to be divided
b : a sum or fund to be divided and distributed

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Other Words from dividend

dividendless \ ˈdi-​və-​ˌdend-​ləs How to pronounce dividendless (audio) , -​dənd-​ \ adjective

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 on the Web About 80% of the tax savings was funneled into stock buybacks, dividends and other such activities while only 20% went to capital spending or research and development. Paul Davidson, USA TODAY, "Has Trump fulfilled his pledge to turbocharge job growth, revive manufacturing? Many say no.," 4 Dec. 2019 That investment will pay dividends for consumers and businesses. Anna Beahm | Abeahm@al.com, al, "New partnerships bringing ultra-fast internet to Alabama," 4 Dec. 2019 The speed and aggressiveness of outside linebacker Jacob Martin is starting to pay dividends for the Texans' defense. Aaron Wilson, Houston Chronicle, "Texans' Jacob Martin plays '100 miles an hour'," 2 Dec. 2019 The Times story also said FedEx spent the bulk of the tax savings on stock buybacks and dividends rather than investing in the company. Stephen Gandel, CBS News, "FedEx CEO claims New York Times Co. paid no federal taxes," 18 Nov. 2019 In the long run, Monday’s game could pay dividends. oregonlive, "Oregon State’s Mikayla Pivec, ‘doing Mik things,’ leads Beavers to 69-57 win over Pacific in preseason WNIT quarterfinals," 12 Nov. 2019 In 2015 - near the bottom of the last oil bust - ConocoPhillips slashed its quarterly dividend from a high of 74 cents a share down to 25 cents. Jordan Blum, Houston Chronicle, "ConocoPhillips sets capital spending at less than $7B a year through 2029," 19 Nov. 2019 Renault owns over 43 percent of Nissan, and would suffer financially if the company lowered its dividend. BostonGlobe.com, "Nissan profit tumbles as it struggles to move past management problems - The Boston Globe," 13 Nov. 2019 The change in alignment from a 4-3-3 scheme paid dividends offensively. Edward Lee, baltimoresun.com, "Loyola Maryland men’s soccer knew it could have a special season. All it needed was 'a slap in the face.’," 12 Nov. 2019

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.

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First Known Use of dividend

15th century, in the meaning defined at sense 1

History and Etymology for dividend

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

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Time Traveler for dividend

Time Traveler

The first known use of dividend was in the 15th century

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Statistics for dividend

Last Updated

10 Dec 2019

Cite this Entry

“Dividend.” The Merriam-Webster.com Dictionary, Merriam-Webster Inc., https://www.merriam-webster.com/dictionary/dividend?pronunciation&lang=en_us&dir=d&file=divide05. Accessed 11 December 2019.

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More Definitions for dividend

dividend

noun

Financial 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

noun

Financial 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
How to pronounce dividend (audio)

English Language Learners Definition of dividend

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

noun
div·​i·​dend | \ ˈdi-və-ˌdend How to pronounce dividend (audio) \

Kids Definition of dividend

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

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dividend

noun
div·​i·​dend | \ ˈdi-və-ˌdend How to pronounce dividend (audio) \

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

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