Companies return cash to shareholders either through dividends (regular cash payments) or buybacks (repurchasing their own shares, which reduces supply and can boost EPS). Both signal financial strength.
Answer: Annual dividend ÷ stock price. Dividend yield = annual dividend per share ÷ stock price. It shows the income return as a percentage.
Answer: Reduces shares outstanding. Buybacks reduce the share count, which increases EPS (earnings per share) and often supports the stock price.
Answer: You must own shares before this date to receive the dividend. Buy before the ex-dividend date to qualify for the upcoming dividend payment.
Answer: Mature, stable utility or bank. Mature companies with steady cash flow (utilities, banks, REITs) typically return the most to shareholders via dividends.
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