A dividend is a payment that a company makes to its shareholders out of its profits or retained earnings. Companies that pay dividends are typically established, profitable businesses in sectors like consumer staples, utilities, healthcare, and financials — sectors known for stable cash flows.

What Is a DRIP (Dividend Reinvestment Plan)?

A DRIP is a program that automatically uses your cash dividend payments to purchase additional shares of the same stock or fund — usually commission-free and sometimes at a slight discount to market price.

How Dividend Growth Investing Works

Dividend growth investing (DGI) focuses not just on current yield but on companies that consistently grow their dividend payments year after year. A stock yielding 2% today that grows its dividend at 10% per year will yield you 5.2% on your original cost basis in 10 years — without any price appreciation.

What Is Dividend Investing? DRIP and Passive Income Explained

Learn what dividend investing is, how DRIP (Dividend Reinvestment Plans) work, and how to build sustainable passive income from dividend stocks and ETFs.