Dividend

1. A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. The pidend is most often quoted in terms of the dollar amount each share receives (pidends per share). It can also be quoted in terms of a percent of the current market price, referred to as pidend yield.

Also referred to as "Dividend Per Share (DPS)."

2. Mandatory distributions of income and realized capital gains made to mutual fund investors.

Watch: Dividend

Taobiz explains Dividend

1. Dividends may be in the form of cash, stock or property. Most secure and stable companies offer pidends to their stockholders. Their share prices might not move much, but the pidend attempts to make up for this.

High-growth companies rarely offer pidends because all of their profits are reinvested to help sustain higher-than-average growth.

2. Mutual funds pay out interest and pidend income received from their portfolio holdings as pidends to fund shareholders. In addition, realized capital gains from the portfolio's trading activities are generally paid out (capital gains distribution) as a year-end pidend.