Stock dividend, or dividend for short, is a payment made by a company to its shareholders. Dividends payments are usually made from the corporation's profit, i.e., the company chooses to share parts of its profits with its investors. Dividends are one of the ways an investor can earn a return on stocks. On the other hand, not all stocks pay dividends — if your main focus is investing for dividends, you will want to specifically seek out dividend stocks. In most stock markets - including the United States and European Union - dividends are usually paid out every quarter, to coincide with fiscal quarters. However as capital markets tend to have lots of variety, some companies may pay out dividends monthly or annually. What is more, a publicly traded company is not required to pay dividends. On the other hand, a private company may also choose to reward its stakeholders with dividends and share a portion of its profits. The important, unchanging part of the dividend definition is that dividends are paid out per share of the stock. For example, if a company pays out $5 dividends quarterly, and you own 20 shares in this company, you will receive $100 in dividends quarterly.