Dividend stocks are stocks that send you a sum of money (usually quarterly, but sometimes annually) simply for owning shares in the company.
To be clear, this money isn’t a capital gain, which you earn when share prices go up or when you sell the stock for profit. A dividend is more like a “bonus” that comes to you in the form of cash or more shares in the company’s stock.
It’s important to note that not all companies pay out dividends. Dividend-paying companies are usually older, more established corporations that have a long track history of positive growth and expansion.
Usually when a company earns more money than it can reinvest in itself, it creates a dividend paying policy for shareholders. For that reason, you’ll rarely see growth companies, small caps, or start-ups issue dividends.
In Canada, some top dividend stocks include:
More information about dividend stocks in Canada:
To learn more about Dividend Stocks, take a look at our Guide to Dividend Investing for all the details.
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