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What is a dividend?

A dividend is a distribution of a company’s earnings, a divvying up. Say you own shares of Coca-Cola, and Coca-Cola makes some profit. If those shares pay dividends (not all do), you get a certain amount of the profit the company distributes to its shareholders. That amount is determined by how many shares you have. Your share of the dividends is in proportion to how many shares you own.

Dividends are almost always paid out in cash payments (occasionally additional shares of stock are issued, but it’s usually cash).

Many of the ETFs you can invest in on Stash pay dividends. These payments usually occur four times a year (at the end of every quarter).

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