Basics

Picking companies whose stocks have a history of paying excellent dividends, a distribution of earnings to shareholders, is a good strategy for people who want a steady income.  Dividends are usually paid out quarterly.  If you are a long range investor, more than five years, and want to increase your portfolio, than re-investing your dividends through a DRIP (Dividend Reinvestment Plan) is an easy way to achieve this.  Note:  Dividends are taxable the year you receive them, even if you then use the money to reinvest in the company’s stock.