Dividend

Definition

• The distribution of earnings to shareholders. Income earned through dividends is considered a capitals gain and is taxed differently than other forms of income. In credit unions, dividends are the money paid to members for deposits, similar to the interest banks pay to their customers for deposits.

Synonyms
allotment, returns, gain, allowance, profit, share

Related Terms and Acronyms

• Combined Ratio After Policyholder Dividends — Definition,
  • A method of measuring the profitability of an insurance company's underwriting.
• Equity — Definition,
  • Ownership in an asset.
  • The value of a property minus outstanding mortgage debt and other liens.
• Financing Expenses — Definition,
  • Expenses sustained from interest payments, financing, and dividends to shareholders.
• Investment Income — Definition,
  • Income that is earned from investments such as interest, dividends, and capital gains.
• Operating Cash Flow (OCF) — Acronym,
  • The money a company generates from its business operations. This revenue excludes costs from certain investments.
• Ordinary Dividends — Definition,
  • The distribution of a company's profits that are subject to full taxation.
• Paid-up Additional Insurance — Definition,
  • The option for a policyholder to purchase additional insurance coverage with additional premiums or policy dividends.
• Passive Activity — Definition,
  • An activity in which a person does not materially participate such as real estate rentals and limited partnerships.
• Passive Income — Definition,
  • Income coming in on a regular basis, with little or no maintenance.
• Policyholder Dividend Ratio — Definition,
  • A ratio comparing the dividends paid to policyholders to net premiums earned by the insurer.
• Rate of Return (RR, ROR) — Acronym, Important,
  • The profit an investment generates, expressed as equity divided by cash flow.
• Return on Equity (ROE) — Acronym,
  • A ratio that shows how profitable a company is when compared to shareholder equity.
• Return on Investment (ROI) — Acronym, Very Important,
  • The profit an investment generates, expressed as equity divided by cash flow.
• Share Certificate — Definition,
  • A certificate of deposit issued by a credit union that pays a specific dividend if held for a specific period. It's the credit union equivalent of a certificate of deposit. A penalty is usually assessed if all or any of the principal is withdrawn before maturity.
• Stock Insurance Company — Definition,
  • An insurance company with multiple stockholders each owning shares in the corporation.
• Vanishing Premium Policy — Definition,
  • A life insurance policy where policy dividends are used to pay the policy's premiums.
• With-Profits Policy — Definition,
  • Insurance that pays the policyholder a portion of the insurer's profits.