OPINION | The importance of dividends explained

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When investing on the stock market the change in a company or index share price only tells one half of the story. Many companies pay dividends that form an important part of an equity investor’s return profile.

What is a dividend?

Dividends are a share of company profits paid out to shareholders. The board of directors approves the percentage of profits declared as a dividend, while the remainder of profits are retained within the company for future use – usually to fund growth or maintain the operations of the business.

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