dividend stocks You on a recurring basis it pays you a cash dividend. And over time, thanks to those cash distributions and capital appreciation fueled by shareholder loyalty, the stock price rises. That’s a great way to build wealth.You see, times change, and investors’ priorities vary, but history keeps proving that investing in stocks that pay dividends is one of the best, if not the best, way to build wealth. The reason is fairly simple. If for growth, you may or may not get it. You are speculating, hoping that your analysis is correct, that the stock you’ve invested in will increase in value. But it might not.However, if you that has paid a consistent and growing dividend, well, you can fairly well calculate your growth rate. Consider the Standard & Poor’s 500 stock index. Study after study has proven that the returns of the index without dividends amounts to a fraction of what they are with reinvested dividends factored in. Which means one thing.If you are investing in stocks on an individual basis, not in a mutual fund or an and you are not considering whether or not the stock is paying a dividend, you may just be gambling and may ultimately end up unsatisfied with your results. That’s because dividends are a measure of a success, a company’s maturity and a company’s commitment to its shareholders.The purpose of a company is to increase shareholder value. Paying a dividend attracts new investors and keeps loyal investors in place. Stocks that do not pay a dividend are required to deliver better-than-expected earnings results – merely meeting expectations is not enough and may send a stock price tumbling.

The dividend stocks is a payment made by a corporation to its shareholders, usually as a distribution of profits.When a corporation earns a profit or surplus, it can re-invest it in the business (called retained earnings), and pay a fraction of the profit as a dividend to shareholders. Distribution to shareholders can be in cash (usually a deposit into a bank account) or, if the corporation has a dividend reinvestment plan, the amount can be paid by the issue of further shares or share repurchase.
The dividend stocks is allocated as a fixed amount per share, with shareholders receiving a dividend in proportion to their shareholding. For the joint-stock company, paying dividends is not an expense; rather, it is the division of after tax profits among shareholders. Retained earnings (profits that have not been distributed as dividends) are shown in the shareholders’ equity section on the company’s balance sheet - the same as its issued share capital. Public companies usually pay dividends on a fixed schedule, but may declare a dividend at any time, sometimes called a special dividend to distinguish it from the fixed schedule dividends. on the other hand, allocate dividends according to members’ activity, so their dividends are often considered to be a pre-tax expense.