What Are the Advantages of Regular Cash Dividends?
Cash dividends can yield extra income with a low rate of taxation. snatch image by Valentin Mosichev from Fotolia.com Investors seeking a stable source of passive income often choose to invest in stocks that pay cash dividends. According to the online finance dictionary, a cash dividend is a share in the profits of a company that is distributed to each shareholder in cash in proportion to the percentage ownership each shareholder has. There are several advantages to owning stocks that pay dividends, including regular income, stable investments and potential tax benefits. Regular Income Since the cash dividends on most stocks pay out on a quarterly basis, investors who own many such stocks can generate quite a bit of passive income. Payments can be made even more regular by diversifying the investments among companies whose quarters start in January, February, and March. That way, the investor will receive dividend payments every month of the year, because every month will represent the
