• Cash dividends are payments made by a company to its shareholders in the form of periodic cash distributions (as opposed to shares or any other form).
  • Cash dividends are often paid on a regular basis, such as monthly or quarterly, but sometimes they are lump sums, such as after settlement.
  • Most brokers offer the choice of accepting or reinvesting cash dividends.
  • Companies that pay dividends are usually established, have stable cash flow and are not in the growth stage.
  • Dividend reinvestment plans (DRIP) are increasingly common among companies and brokers.