A dividend is the financial benefit of a share in the profits of a public limited company calculated on the proportion of shares held. Dividends are paid to individual shareholders - shareholders.

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History of dividends

The history of dividends dates back to antiquity when shares were first issued. The first known issue of dividends dates back to the 17th century in Amsterdam when the VOC (Dutch East India Company) was founded and issued shares. These shares brought the owners a share of the company's profits through dividends.

During the 18th and 19th centuries, the issuance of dividends became common practice, both in Europe and North America. During the 20th century, dividend yields steadily increased, driven by economic development and the growing number of companies issuing dividend-paying shares.

Today, dividend issuance continues to spread around the world, allowing investors to earn passive income from dividend stocks.

What does a high dividend payout mean?

High dividends can be an indicator of a company's stability and good financial health. These companies can generate sufficient profits and have a stable cash flow, allowing them to pay high dividends to their shareholders.

However, high dividends do not automatically mean a quality company. Some companies may pay high dividends at the expense of reinvesting in their assets, which can have a negative impact on long-term growth and stability.

For this reason, it is important to analyze a company's financial situation before investing in high-dividend stocks. Only then can you get an accurate picture of the company's financial health and consider whether it is a good investment.

Best dividend stocks

Companies that are often considered good dividend stocks to invest in include Johnson & Johnson, Procter & Gamble, Verizon Communications, and AT&T. These companies have solid financial health and a long history of paying dividends.