A dividend is a payment to shareholders. A dividend payment can be in the form of cash, stock, or property. All dividends must be declared by the board of directors and are usually paid out on a quarterly basis.
Mature, well established, blue chip companies tend to pay dividends as it gives investors an incentive to own their stock. Small, rapidly growing companies tend not to pay dividends as any profits are reinvested within the company in hopes of maintaining a rapid pace of growth.
