4.12 Introduction: dividend

One of the most important reasons for investors to buy shares is the fact that you are entitled to the company’s profits. The profit paid out by the company is also called the dividend. A dividend can either be paid out in cash or, in many cases, when facilitated by your broker, it can be reinvested in stocks.

Please note that it is important to always evaluate  how much of the company’s profit is paid out in dividends because it can also be seen as a sign of weakness.