What are dividends and how do they work?

A dividend is a sum of money paid regularly by a company to its shareholders. This money comes from the company’s profits and is distributed on a regular, predetermined basis. 

Dividends are paid automatically to shareholders through their broker. Brokers provide members with the option to have the dividend paid out as cash, or be reinvested back into their holdings as the equivalent of additional shares.

Each company has a predetermined date for when you must be a shareholder in order to receive dividends. 

For more information on how dividends work within your portfolio, we recommend reaching out to your broker’s customer service team for more information.