cash dividend

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 ?
BANKING AND CREDIT NEWS-July 26, 2019-Huntington Bancshares declares 7% increase in quarterly cash dividend
M2 EQUITYBITES-July 26, 2019-Huntington Bancshares declares 7% increase in quarterly cash dividend
Global Banking News-July 26, 2019-Huntington Bancshares declares 7% increase in quarterly cash dividend
While Saga shareholders may not be wholly pleased with where the company's shares are today, they will most certainly enjoy the benefit of a healthy quarterly cash dividend to be paid in a matter of weeks.
Camping World announced that its board declared a cash dividend of 15.32c per share on the Company's Class A common stock and a cash distribution of 8c per common unit on CWGS Enterprises, LLC's common units.
Board of Directors declared a fourth quarter cash dividend of $0.13, which is payable on December 20, 2018, to shareholders of record on December 10, 2018.
The cash dividend will be coming from the bank's unrestricted retained earnings.
Auto Business News-March 14, 2018--Titan International announces Q1 2018 cash dividend
HEICO Corporation (NYSE: HEI.A) (NYSE: HEI) board of directors has declared a regular semi-annual cash dividend of USD 0.08 per share payable on both classes of common stock, the company said.
International Resource News-June 12, 2017--Titan International announces quarterly cash dividend
Areej Vegetable Oils & Derivatives SAOG general assembly approved 35% or 350 Baises cash dividend for each share with a nominal value of RO1, in addition to 50% stock dividend.