A dividend is a distribution of profit that a company pays to its shareholders. When a company generates profit, it may decide to distribute part of it instead of reinvesting all earnings back into the business. As a shareholder, you then receive an amount per share that you own.

Not every company pays dividends. Some choose to reinvest all profits to support further growth.

Companies that pay dividends often do so annually or quarterly. The amount is usually determined per share, for example €2 per share. The more shares you own, the higher the total amount you receive.

Dividends can be attractive for investors who want to receive regular income from their investments. It is important to understand that a dividend is not additional money created out of nothing. On the payment date, the share price usually decreases by approximately the amount of the dividend distributed.

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