cash dividend

(redirected from Cash Dividends)

Cash dividend

A dividend paid in cash to a company's shareholders. The amount is normally based on profitability and is taxable as income. A cash distribution may include capital gains and return of capital in addition to the dividend.

Cash Dividend

A share in the profit of a publicly-traded company or another investment vehicle that is distributed to each shareholder in cash in proportion to the percentage of ownership in the company each shareholder has. Cash dividends contrasts with automatic dividend reinvestment, whereby companies and investment vehicles enter into agreements with shareholders to automatically buy more shares with dividends. They also differ from dividends that are paid in the form of stocks or bonds. Companies tend to pay more in cash dividends when they do not wish to reinvest profits into expanded operations. See also: Plowback ratio.

cash dividend

A dividend paid in cash (that is, by check) to holders of a firm's stock. Although the amount is usually based on profitability, it may temporarily exceed net income. Certain legal and contractual restrictions may limit a firm's ability to pay cash dividends.
What are the advantages or disadvantages of investing in firms that pay large cash dividends?

Income investors look for corporations that pay consistent, large dividends. Income can be predicted by purchasing one group of stocks that pays dividends quarterly beginning in January, one beginning in February, and one in March. Growth investors or investors in a high tax bracket may not want these stocks. They favor companies that forgo dividends to grow internally. Since dividends on stocks are taxable when paid, highly taxed investors postpone taxes by holding growth stocks and selling for gains later, rather than holding dividend paying stocks. Capital gains taxes may be lower than the ordinary tax rates on dividends.

Jeffrey S. Levine, CPA, MST, Alkon & Levine, PC, Newton, MA
References in periodicals archive ?
In addition, the Board declared quarterly cash dividends on its four series of preferred stock.
Approved amendments to TSMCs Articles of Incorporation, authorizing TSMCs Board of Directors to distribute cash dividends on a quarterly basis.
Saga intends to pay regular quarterly cash dividends in the future as declared by the Board of Directors.
ASIA United Bank (AUB) on Wednesday disclosed its intent to pay a total of P776 million in cash dividends to its stockholders in the next two months.
Earnings are more akin to the net income of a company from which cash dividends are sourced.
Summary: Tupras might pay out gross cash dividends of TRY 6.5/share for 2015, according to Bloomberg.
Investors are expecting cash dividends from Oman Refreshments Co.
In February, the Bank paid its third USD 0.10 per share quarterly cash dividend payment to shareholders, which followed four consecutive quarterly cash dividends of USD 0.09, USD 0.08, and USD 0.075 per share.
The quarterly and special cash dividends will be funded by cash on Saga's balance sheet.
In August 2018, the Bank paid its first $0.10 per share quarterly cash dividend payment to shareholders, which followed four consecutive quarterly cash dividends of $0.09, $0.08, and $0.075 per share.
This supplemental cash dividend is in addition to the previously announced regular monthly cash dividends that Main Street declared for the second quarter of 2019 of USD 0.60 per share, or USD 0.20 per share for each of April, May and June 2019.
Consistent with returning value to our shareholders, the Board of Directors will also consider declaring special cash dividends, stock dividends, and stock buybacks in the future, the radio broadcasting company notes.