A dividend is a portion of a company's profits paid out to shareholders, usually every quarter. Some investors focus on dividend-paying stocks and funds for the income and stability they can provide. This is educational information, not investment advice.
Dividend Investing
Getting paid to hold — how dividends fit into a long-term portfolio.
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Yield and total return
Dividend yield is the annual dividend divided by the share price — a 3% yield pays $3 a year per $100 invested. But what matters most is total return: dividends plus price growth. A high yield isn't automatically better; it can signal a struggling company. Broad dividend ETFs (like SCHD or VYM) spread the risk across many companies.
Reinvesting dividends
Many investors use a DRIP (dividend reinvestment plan) to automatically buy more shares with each payout, which compounds growth over time. In a taxable account, remember that dividends are generally taxable in the year received.
Educational information only — not investment advice, and not a recommendation to buy any security. Expense ratios are approximate and can change; verify with the fund issuer. We are not a licensed financial advisor.
Frequently asked questions
Are dividend stocks safer?
Dividend payers are often established companies, but dividends aren't guaranteed and can be cut. Diversify rather than chasing the highest yields. This is educational information, not advice.
What is a DRIP?
A dividend reinvestment plan automatically uses your dividends to buy more shares, compounding your position over time.
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