What are the differences between dividend stocks and shares?

differences between dividend stocks and shares

Written by Eleana Ntagia

Updated: 2023-08-01 13:43:01

Shares and dividend stocks are closely related but are not the same thing.

  • A share is a unit of ownership in a company, representing a portion of its total value. When you purchase a share, you become a part owner of the company and have the right to vote on important company decisions, such as electing the board of directors or making changes to the company's charter.

  • Dividend stocks are shares of companies that pay regular dividends to their shareholders. Dividends are payments made by companies to their shareholders as a portion of their profits. The amount of the dividend paid to each shareholder is typically determined by the company's board of directors.

So, in summary, all dividend stocks are shares, but not all shares are dividend stocks. Shares represent ownership in a company, while dividend stocks are shares of companies that pay regular dividends to their shareholders.

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