Dividend Stock

A dividend stock refers to shares of a company that regularly distributes part of its earnings to shareholders in the form of dividends. These stocks are typically issued by well-established, financially stable companies with a history of consistent profit generation. Investors are attracted to dividend stocks because they provide a steady income stream, in addition to potential capital appreciation. Dividend stocks are popular among income-focused investors, such as retirees, who rely on the regular payouts. They are generally considered less volatile than growth stocks, although the dividend can be reduced or suspended if the company faces financial difficulties.

Example

Shares of a blue-chip company like Coca-Cola, which consistently pays quarterly dividends, are considered dividend stocks.