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Dividend

A dividend is a distribution of money or property that a corporation pays to shareholders, usually after authorization by its board.

By Betta Signals Research Desk · Reviewed October 24, 2026

Plain-English definition: A dividend is a distribution of money or property that a corporation pays to shareholders, usually after authorization by its board.[1]

How the term is used

Regular, special, qualified, nonqualified, and stock dividends can have different economic or tax treatment. The declaration, ex-dividend, record, and payment dates answer different questions.[2][1]

What to check before relying on it

Dividend yield is not guaranteed. A company can reduce or suspend payments, and a large one-time dividend should not be projected as recurring income.

Example

An investor who buys on or after the ex-dividend date generally does not receive the declared cash dividend from the seller's holding period.

Dividend yieldDistributionTotal return

Research last reviewed: October 24, 2026. This definition is educational and does not evaluate a particular security.

Sources

  1. IRS Topic No. 404: Dividends and Other Corporate Distributions — U.S. federal tax terminology for dividends and other distributions. Accessed October 24, 2026.
  2. FINRA: Stocks — stock ownership, risks, dividends, and market terminology. Accessed October 24, 2026.