Dividend is the portion of a company's profit that it may decide to pay out to shareholders. A dividend is paid along with any income from the company's share value, considered as "rewards" to shareholders for holding shares.
Companies in certain areas have a reputation for dividend payouts. This is more commonly seen in well-established companies because they do not have to reinvest all the profits in their business segment. As a result, companies can pay special dividends once, or pay periodically, such as quarterly or annually.
Regular dividend payout is a significant advantage of popular stocks; common stocks can do the same thing. However, unlike payments for bond interest rate, dividend payout is not guaranteed. Companies can cut down and even stop paying dividends when they experience a challenging economic period.