Dividends and buybacks

Dividend

A payment some companies make to their shareholders, usually out of profits and often every quarter.

Why does it matter?

It is one of the ways a company can return money to its owners.

How do I read it?

Not every company pays dividends; many reinvest their money instead. A dividend can be raised, cut or stopped, so it is not guaranteed.

Example

A company paying $0.50 per share every quarter pays $2 a year per share. With 100 shares, you would receive $200 a year, before taxes.