A dividend is money paid directly to an investor in a company's stock. Some publicly owned companies offer a dividend with their stock, while others do not. The choice of buying and owning a stock that pays a dividend is up to the individual investor, as there are both positive and negative aspects to consider. A company that offers a dividend with its stock is often a larger, more stable business in a field with little growth or a slow, steady growth potential.

When a company offers a dividend to its stock holders, it is taking money that could be reinvested into the company, and distributing it to shareholders as a benefit of investing in the company. Receiving a dividend is good for investors, because they get a guaranteed return on their investment in the form of the money from the dividend. A stock that returns a dividend is good as an income investment or a long term growth investment. This is because these stocks tend to remain stable, and offer a tangible monetary benefit to investors.

Some investors shy away from stocks that offer a dividend for this very reason. A company that gives its investor a dividend is not using that money to expand the business. Therefore, a stock that gives a dividend may be less likely to grow in value, or may grow at a slower rate in comparison to a company that does not offer a dividend, but instead uses its profits to expand or seek out new business opportunities. Investors seeking shorter term investments or rapid growth tend to look for stocks that do not offer a dividend.

The dividend a company offers to its shareholders is usually paid out each quarter. The amount of dividend is set at a certain dollar value for each share of stock owned. If you own 100 shares of a stock which pays 1 US dollar (USD) per share each year in dividend, you will receive 25 USD in dividend every three months. These quarterly payments of 25 USD make the annual dividend 100 USD. Most companies that pay a dividend also have a dividend reinvestment program.

With a dividend reinvestment program, instead of taking the dividends as payment, the investor can choose to reinvest each dividend payment and take the value of the dividend in stock instead of cash. In this case, the investor's stock value would increase by 25 USD the first quarter. Because the value of the stock is now higher than before, the dividend for the next quarter would actually be higher than 25 USD, based on the number of additional shares that the first dividend was able to purchase. By reinvesting dividends, an investor can easily increase his or her stock holdings.

With any investment, research, planning, an eye for the market, and a little bit of luck go a long way. Depending on your investment needs, a stock that offers a dividend can be a profitable long-term investment.