Dividend
A cash (or stock) payment a company makes to shareholders from its profits, typically on a quarterly schedule.
A dividend is a distribution of a company's earnings to its shareholders. The board of directors sets the dividend amount per share and the payment schedule — most US companies pay quarterly.
Not all companies pay dividends. Growth-stage companies reinvest earnings; mature, cash-generative businesses (utilities, consumer staples, blue chips) tend to pay them. A consistent, rising dividend is a signal of financial health and management confidence.
Dividends are not guaranteed. A company can cut or suspend its dividend at any time — and the stock usually falls sharply when that happens, both for the income loss and the negative signal about the business.
On the desk
You own 1,000 shares of a stock that pays a $0.50 quarterly dividend ($2.00 annualized). You receive $500 every quarter, $2,000 per year, regardless of where the stock price moves.