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A distribution of a portion of a company's earnings to its shareholders, typically paid in cash on a quarterly basis.
Dividends represent a tangible return of profits to shareholders. Companies that consistently pay and grow dividends are often mature, profitable businesses. The "Dividend Aristocrats" are S&P 500 companies that have increased their dividends for at least 25 consecutive years. When a dividend is declared, three key dates matter: the declaration date (announced), the ex-dividend date (you must own the stock before this date to receive the payment), and the payment date. Dividends can be qualified (taxed at lower capital gains rates) or non-qualified (taxed as ordinary income).