Explore commonly used personal finance terms.
The annual dividend is the total amount a company distributes to its shareholders in a year. It is expressed as a cash amount or a percentage yield based on the stock price. Annual dividends provide investors with a source of income, particularly in stable, mature companies. Consistent or growing annual dividends signal financial health and stability, making dividend-paying stocks popular among income-focused investors. For shareholders, annual dividends contribute to total returns and can be reinvested to compound growth.
