What is a dividend and how do I receive it?

A dividend is a portion of a company's profits that gets paid out to shareholders. When you own shares of a dividend-paying stock, the company will deposit these payments directly into your investment account, typically quarterly (four times per year). The more shares you own, the larger your dividend payment will be. It's essentially getting paid just for being a partial owner of the company.

What is dividend yield and why does it matter?

Dividend yield is the percentage return a company pays out in dividends relative to its stock price. For example, if a stock is trading at $100 and pays $3 in annual dividends, its dividend yield is 3%. This number helps you compare the income potential of different dividend stocks regardless of their share price. Generally, a higher yield means more income per dollar invested, though extremely high yields can sometimes indicate risk.

What is an ex-dividend date?

The ex-dividend date is an important deadline that determines whether you'll receive an upcoming dividend payment. To get the dividend, you must purchase the stock before its ex-dividend date. If you buy on or after this date, the seller will receive the dividend instead. Think of it as a cutoff date that the company uses to determine who's eligible for the next dividend payment.

Why do companies like Apple and Microsoft pay dividends?

Companies like Apple and Microsoft pay dividends as a way to reward shareholders and signal financial strength. When a company has grown to a certain size and generates more cash than needed for operations and growth, paying dividends becomes an attractive way to return value to investors. For established companies like those in this group, regular dividend payments help attract long-term investors and demonstrate management's confidence in the company's stable financial future.

What's the difference between growth stocks and dividend stocks?

Growth stocks typically reinvest most or all of their profits back into the business to fuel expansion, leading to potential share price increases but little or no dividends. Dividend stocks, on the other hand, regularly distribute a portion of their profits to shareholders as cash payments. Many companies in this collection, like Apple and Microsoft, actually combine both approaches—they continue to grow while also paying dividends, offering investors potential price appreciation plus regular income.

12 handpicked stocks

Popular Dividend Stocks

Invest in well-known companies that not only offer growth potential but also pay you a regular income. These household names have strong track records of sharing profits with their shareholders through dividends.

Han Tan | Market Analyst

Published on May 24

Top Picks from This Group

Here are a few of the assets in this group. Create an account to unlock the full list.

Apple, Inc.

AAPL

Current price

$257.13

Microsoft Corporation

MSFT

Current price

$515.74

Coca-Cola Company, The

Current price

$66.10

Pepsico, Inc.

PEP

Current price

$142.31

Visa, Inc.

Current price

$345.95

MasterCard Inc.

Current price

$577.33

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12 Month Growth Potential

Use the growth calculator to see how much investing in these assets could return over one year, based on aggregated analyst sentiment provided by Refinitive Ltd.

If you invested across these assets:

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In 12 months it might be worth:

$1,000.00

+6.16%

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About This Group of Stocks

Our Expert Thinking

These stocks combine name recognition with dividend income potential. We've selected established companies across different sectors that have demonstrated commitment to paying shareholders a portion of their profits regularly, giving you both potential growth and ongoing income.

What You Need to Know

Dividends are regular payments companies make to shareholders from their profits. These stocks come from various industries including technology, food and beverage, energy, and financial services, allowing you to diversify your income sources while investing in familiar brands.

Why These Stocks

Each company in this collection has a history of dividend payments, making them attractive for income-focused investors. We've handpicked well-established brands that not only offer name recognition but have demonstrated a commitment to sharing profits with their shareholders.

Group Performance Snapshot

6.16%

Average 12 Month Profit

On average, analysts expect assets in this group to grow 6.16% over the next year.

10 of 12

Stocks Rated Buy by Analysts

10 of 12 assets in this group are rated Buy by professional analysts.

Source: Analyst sentiment is provided by Refinitiv Ltd, a global leader in financial market data with over 40k business clients. Refinitiv Ltd is an independent third party to Nemo. This is not advice.

Why You'll Want to Watch These Stocks

💰

Get Paid While You Wait

These companies pay you regular dividends just for being a shareholder. You'll earn income even when stock prices aren't moving up.

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Household Names You Already Trust

From the coffee you drink (Starbucks) to the technology you use (Apple, Microsoft), these are brands you interact with daily and can now own a piece of.

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Built for Uncertain Times

Dividend-paying companies tend to be more stable during market downturns. Many of these stocks have histories of maintaining or increasing their dividends even through tough economic periods.

Get the full story on this Basket. Read our detailed article on its risks and potential.

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