Dividends
What are they?
They are periodic payments that a company makes to its shareholders as part of the profits earned. These payments represent a share of the profits generated by the company and are distributed in proportion to the number of shares each investor holds.
Dividends are one of the most common ways in which companies reward their shareholders for their investment and trust. They can be paid in cash or in the form of additional shares, depending on the company’s dividend policy.
Key aspects to consider
Dividends are usually determined by the company’s board of directors and are subject to several factors, such as financial results, growth objectives, and market conditions. There are different types of dividends, including:
- Cash dividends: Direct payments made to shareholders.
- Stock dividends: New shares are granted instead of cash, increasing the shareholder’s ownership in the company.
- Special dividends: One-time payments made when the company obtains exceptional profits or has surplus capital.
In the context of real estate investments, some companies, such as Real Estate Investment Trusts (REITs), distribute dividends regularly to their investors, derived from rental income or property sales.
For investors, dividends represent a source of passive income and can be an indicator of the company’s financial health. However, not all companies pay dividends, as some prefer to reinvest the profits to foster growth.
The decision to invest in companies that pay dividends depends on the investor’s profile and objectives, whether it’s to generate steady income or seek capital appreciation.