Dividend Investment Glossary
The more you know, the better you invest. Learn essential financial terms easily.
189 terms in total
Yield on Cost (YoC)
Yield on Cost (YoC) reveals your *true* dividend yield based on your original investment. A key metric for long-term investors.
Payout Ratio
The Payout Ratio shows the dividend percentage of a company's net income. Assess dividend sustainability.
Ex-Dividend Date
The **ex-dividend date** is key for dividend investors. Buy before this date to get paid. Miss it, miss the dividend!
Dividend King
Dividend Kings are elite stocks with 50+ years of dividend increases. Learn how to find and invest in them for reliable income.
Dividend Aristocrat
Dividend Aristocrats are S&P 500 companies with 25+ years of consecutive dividend increases. Reliable income stocks.
Compound Interest
Compound interest is the principle of asset growth where reinvested dividends earn their own returns. Experience the 'eighth wonder of the world' through time and patience.
WACC (Weighted Average Cost of Capital)
WACC is the average rate a company pays to finance its assets. It is a critical hurdle rate used to evaluate investment efficiency and dividend sustainability.
Monthly Dividend
Monthly dividends provide a consistent paycheck from your investments. Ideal for compounding wealth and managing recurring living expenses.
Special Dividend
A special dividend is a non-recurring distribution of company assets to shareholders. It often acts as a positive signal of financial health and boosts total returns.
Dividend Growth Rate
Dividend Growth Rate (DGR) shows how quickly a company's dividend increases. Crucial for long-term income!
DRIP (Dividend Reinvestment Plan)
Automatically reinvest your dividends to buy more shares, turning dividend payments into a powerful compounding machine that builds wealth while you sleep.
BDC (Business Development Company)
Investment companies that provide capital to small and mid-sized businesses. BDCs must distribute 90% of income as dividends, offering high yields typically between 8-12%.
REITs (Real Estate Investment Trust)
Own real estate without being a landlord. REITs let you invest in shopping malls, apartments, and data centers while receiving 90% of profits as dividends.
Covered Call
Generate income selling covered calls on stocks you own. Boost yield, but cap upside. Great for sideways markets.
Dividend Cut
A dividend cut is a reduction or elimination of a company's dividend, often signaling financial distress and leading to significant stock price declines.
Preferred Stock
Preferred stock is a hybrid security combining features of stocks and bonds. It offers priority in dividends and liquidation but typically lacks voting rights.
TTM (Trailing Twelve Months)
Frequently seen on analysis sites, TTM stands for 'Trailing Twelve Months'. It is essential for evaluating a company based on the most recent performance trends, regardless of fiscal year closings.
Yield Trap
A **yield trap** is when a high dividend yield is unsustainable, often leading to dividend cuts and stock price drops. Avoid these!
ETF Distribution
ETF distributions represent the payment of income earned by an ETF—such as dividends or interest—to its investors. Understand the mechanics of ETF income for better cash flow management.
After-Tax Yield
Don't be fooled by gross percentages. After-Tax Yield represents the *real* money that hits your pocket after deducting withholding taxes. Always plan based on net income.