Explain Stock Dividends....

The easiest way to explain stock dividends is that they are another source of income for investors. Dividends are basically a way that a corporation rewards its investors.

As an example a corporation may offer a .25 cent per share quarterly dividend. So over the course of a year that adds up to basically $1.00 a share. So if you owned 5000 shares of that corporation you would receive a dividend of $5,000.00 a year. Many older investors will invest in dividend stocks to supplement their income during retirement.

Some people really like stocks that pay dividends because not only will you make money if the price of the stock you own goes up, but you also get a nice little quarterly bonus check.

In recent years many corporations have lowered their dividends and many, especially in the technologies sector, do not offer a dividend of any kind at all.