Dividend stocks are shares of publicly traded companies that regularly return a portion of their profits to shareholders, most often through quarterly cash payments.
For many investors, dividend stocks offer an appealing balance: steady income today and the potential for long-term growth. Historically, dividend-paying companies have also shown lower volatility than the broader market, making them popular with income-focused and risk-conscious investors.
That said, not all dividend stocks are created equal. Understanding how dividends work and how to evaluate them is essential before investing.
This post originally appeared at The Motley Fool.