What Is a Dividend? A Clear Explanation with Real Examples
Editorial Staff, reviewed November 2, 2026
A dividend is a cash payment a company or fund makes to its shareholders, set as an amount per share. Coca-Cola's latest quarterly dividend is $0.53 a share on our data from Nov 5, 2026, so someone holding 100 shares receives $53.00 each quarter.
How dividends work
A company's board decides how much to pay and announces the amount and the dates. If you own the shares before the ex-dividend date, you get the payment on the pay date, whether or not you still own them that day. Nobody has to apply. The cash lands in your brokerage account, or buys more shares if you have turned on reinvestment.
Companies aren't obliged to pay a common stock dividend, and they can raise, cut or stop it. That is why this site's ticker pages show every change on record and not just the latest figure.
A real example: 100 shares of Coca-Cola
| Shares owned | 100 |
| Latest quarterly dividend | $0.53 |
| Cash each quarter | $53.00 |
| Cash over a year, at that rate | $212.00 |
| Cost of 100 shares at the Nov 4, 2026 close of $95.80 | $9,580.00 |
| Dividend yield on that cost | 2.21% |
You can run the same numbers on anything you own with the dividend income calculator, or open Coca-Cola's page for its full record.
Who pays dividends
Common stocks, ETFs, closed-end funds, ADRs and preferred shares all pay them, at quite different typical levels. This table counts what is paying now on our data.
| Type | Paying now | Median yield |
|---|---|---|
| Stock | 1,847 | 2.52% |
| ETF | 4,133 | 2.50% |
| Closed-end fund | 326 | 8.80% |
| ADR | 161 | 3.94% |
| Preferred | 395 | 7.50% |
Payment frequency: quarterly vs. monthly
Quarterly is the most common schedule on our record, with 3,459 securities paying four times a year, against 1,644 paying monthly and 128 weekly. A monthly schedule changes when the money arrives and not how much of it there is: a $0.10 monthly payment and a $0.30 quarterly payment are the same income.
Ex-dividend date: the date that matters
The ex-dividend date is the cutoff. Buy before it and you receive the coming dividend, and buy on or after it and the seller receives it. Under FINRA Rule 11140, the ex-date for an ordinary cash dividend is generally the same day as the record date. How dividends are paid goes through every date in order, and the ex-dividend calendar lists the upcoming ones.
Qualified vs. ordinary dividends: the tax difference
The IRS treats all taxable dividends as ordinary income unless they are qualified, in which case they get the lower capital gain rates of 0%, 15% or 20%. To be qualified on common stock, you must have held the shares more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. Your Form 1099-DIV shows which is which, and the dividend tax guide has the 2026 brackets.
Dividend yield vs. dividend growth
Yield is what a holding pays now relative to its price, and growth is how fast that payment rises. A 2% yield growing 10% a year overtakes a flat 5% yield in about 10 years, since 2% times 1.1 to the 10th power is 5.19%. The dividend growth calculator lets you try your own numbers.
Sources
Checked on November 2, 2026. Tax rules and fund rules change, so check the current version before you act.
Related dividend guides
This is general education and not tax or investment advice. Securities named here illustrate the arithmetic and are not suggestions. See the disclaimer.