• Dividends are payments a company makes to return value to its shareholders

• Dividends are more likely to be paid by well-established companies

Dividend stocks are publicly listed companies that pay out regular dividends. 

Dividends are payments a company makes to return value to its shareholders. A dividend is paid per share and typically made on several occasions over a fiscal year. So, if you own 10 shares in Apple Inc and they pay a $1.00 dividend twice per year, you will receive $20 annually. 

Dividends are more likely to be paid by well-established companies, rather than those that are still growing. As such, technology and other high-growth companies rarely pay dividends because they need to reinvest their profits into fueling its growth. 

Dividend payments indicate a company's financial well-being, and the share price can rise and fall depending on whether a dividend increases or decreases.  

Companies can pay several different types of dividends: 

• Cash dividends.  

• Cash Dividends are the most common type of dividend. Companies pay these in cash directly to shareholders. 

• Stock dividends.  

• In leu of paying cash, a company may opt to pay investors with additional shares of stock. 

• Dividend reinvestment programs (DRIPs). 

• Investors in Dividend reinvestment programs reinvest any cash dividends back into the company's stock immediately, often at a discounted price. 

• Special dividends.   

• These dividends are typically additional to the regular dividends that a company pays out. A company often issues a special dividend when they accumulate cash they do not need or when they generate windfall profits. 

• Preferred dividends.  

• Preferred dividends are issued to owners of preferred stock. Preferred stock is a type of stock that functions like a stock and a bond. Dividends are usually paid quarterly, but unlike dividends on common stock, dividends on preferred stock can be fixed and will take preference over dividend payments to common stockholders.