Dividend

A dividend is the share of profit a company voluntarily pays out to its shareholders. The amount is set at the annual meeting. Example: With a $2-per-share dividend and 100 shares in your portfolio you receive $200 gross (before tax). Important: on the 'ex-date' the price typically drops by the payout amount. A dividend isn't 'free money on top' — it's a portion of return paid out of the price.