Dividend definition

Dividend has a particular significance in relation to IG's platform. Here, we define dividend in general investing.

A dividend is the portion of profit that a company chooses to return to its shareholders, usually expressed as a percentage.

When a company makes profit, it can choose to either reinvest all of its profit back into the business or pay some portion (or all) of it back to shareholders in the form of a dividend. It is one of the ways in which shareholders can hope to earn money from their investment; if a business does not offer a dividend then investors will hope to be compensated in the form of high share growth.

Dividends usually come in the form of either a one-off or regular cash payments, but can also be paid in property or further shares of stock.

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