Not all shares are created equal. Learn the key differences between common and preferred stock, how dividends work, and which might suit your investment goals.
When you buy stock, you usually get common stock. But companies can also issue preferred stock, which behaves more like a hybrid of a stock and a bond. Understanding the difference helps you choose the right investment for your income needs and risk tolerance.
Dividends are payments made by a corporation to its shareholders out of profits. They represent a share of the company's earnings. Companies that pay dividends are often mature, stable businesses.
Most U.S. companies pay quarterly, but some pay monthly or annually.
Annual dividend per share ÷ stock price. A 3% yield means you get $3 per year for every $100 invested.
Dividend Reinvestment Plans automatically use dividends to buy more shares, accelerating compounding.
Estimate how much annual dividend income you could generate and see the power of reinvestment.
DRIP can significantly boost long‑term returns. This is a simplified projection; actual dividends and prices change.