Dividends are cash payments made to shareholders. As a shareholder you are part owner of the company and therefore are entitled to share in the profits. Dividends can also help you determine when a share is undervalued, and priced right for purchase.
There are a number of other additional benefits to owning dividend paying shares, and I discuss my top five in this article.
1. Dividends provide an immediate return
2. Your safety buffer against the worst case scenario
3. Dividends increase over time
4. Dividends have a long history of being paid
5. Dividend yield can help you determine when to buy
Thanks to My Own Advisor for allowing me to guest post on his awesome site!