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What is a Dividend?

 A dividend is an amount of money given to owners of the common stock of certain publically owned companies.  It will be a certain amount of money for each share of stock owned.

This money can come from the money that a company has, and the reason it has “extra” money can be because the company earned it, or because they borrowed it, or because they issued some form of financing that gave it more money.

A cash dividend is only one type of return that a publically held company can give to the owners of its shares. Other types of “dividends” can be stock dividends, where you receive a certain number of shares for each share that you already own; or sometimes, you receive a certain amount per share that you originally used to buy the share in the first place.  This latter type of dividend is more properly and correctly called a return of capital.

The Dividend Growth Portfolio is interested in cash dividends where these dividends grow at a very high rate each and every year.