Dividend Stocks — What They Are, And Why You Should Own Them
For my regular readers, it will come as no surprise that I occasionally like to go deep on an article. These articles typically don’t get as many full read-throughs as shorter articles or itemized (list-style) articles, but sometimes as a writer, you just have to say f*** it and write what you like to write about. This is going to be one of those times.
This will be a more long-winded article because the topic deserves a somewhat complete (albeit, simple) explanation of the content. By the end of this article, I hope to give the reader a basic but complete understanding of what a dividend stock is and why they are my investment of choice.
What is a Dividend Stock?
A dividend stock is a stock just like any other, except that it pays out a dividend. I realize that I basically just used the word I’m trying to define in the definition there. Let me take it a bit further: a dividend is a payout of company profits to the shareholder. So, to wrap this up in a neat bow — When you own a dividend-paying stock (a dividend stock), you will be paid out a proportional amount of the company’s profits for as long as you hold the stock. For example, if I owned 1 share of company X, which was valued at $100.00, and the company paid out a $5.00 dividend annually, by the end of year 1 my…
