A dividend-bearing asset or investment is one that provides periodic payments, known as dividends, to its holder. These payments are typically distributed from a company's profits, representing a portion of the earnings distributed to shareholders. The frequency of dividend payments can vary, often occurring quarterly, semi-annually, or annually. dividend-bearing investments are attractive to investors seeking a regular stream of income in addition to potential capital appreciation. The yield is usually a percentage, and is dependent upon the total cash payment divided by the current share price.
Dividend-bearing meaning with examples
- The investor meticulously curated a portfolio primarily composed of dividend-bearing stocks, seeking a reliable passive income stream. He carefully analyzed the company's financial health, ensuring their ability to consistently issue dividends over time before investing. His strategy aimed to balance growth potential with a steady income flow, reducing overall risk through a combination of assets.
- Before purchasing corporate bonds, the financial analyst meticulously assessed whether they were dividend-bearing. These bonds, issued by established companies, were deemed suitable for retirees seeking a predictable stream of income. The stable interest payments offered by the bonds would complement the portfolio. The analyst was particularly focused on diversifying the holdings to minimize overall volatility.
- Retirement planning often involves strategic allocation to dividend-bearing real estate investment trusts (REITs), which offer the advantage of liquidity while providing regular income from rental properties. Choosing REITs that are publicly traded provides another layer of stability. The income generated from the dividends helps create a stream of payments over the lifespan of the individual.
- The fund manager's investment strategy included the allocation to several dividend-bearing exchange-traded funds (ETFs), aiming to provide broad market exposure while simultaneously generating consistent income. The ETFs followed an index of companies with established dividend payout records. Their income generated provides a valuable source of passive cash flow to supplement the value.