Dividends are payments a business makes to their investors (shareholders). The frequency of the payments can vary, and usually you'd only see this with established businesses. New businesses are mostly focusing on keeping the lights on...making investors wealthy isn't their immediate goal.
The key to this particular type of payment is where it comes from. Businesses can pay their investors dividends from their earnings, or from shareholders equity (paid in capital). Shareholders equity is the net of the whole shebang...the business's total assets less the total liabilities.
Capital dividends come from the paid in capital. Because it's "paid in" capital, these dividends are not usually taxable because it's looked at as the company returning the money the investor already put in (it's not a profit, per se). But, if the company is just returning money, rather than distributing profits, this can mean that the company isn't turning profits...the company may be struggling.
As a side note, if you were wondering, industries that often pay dividends on the regular are oil and gas, banks (really most anything financial), real estate and pharmaceutical.
Related or Semi-related Video
Finance: What is a Hard Asset?12 Views
Finance allah shmoop What is Ah hard asset Yeah It
takes a lot of hard work to get an asset
like that Okay So hard asset is just one that
you can bang on touch Engage with cell Alright examples
Oil it's Hard asset gold Hard of vintage nineteen Fifty
seven Ferrari with beige leather interior hard four thousand head
of longhorn cattle in texas A commercial building in the
best part of town All of these arm or less
commodities Hard assets Well okay Okay The categories Rare cars
art coins stamps stuff like that that's where they fit
So what do you care if something is ah hard
asset or a soft one Well most or all hard
assets are commodities and they generally do very well in
periods of very high inflation when you know stocks were
getting crushed And yeah the feds raising rates appoint a
quarter now forever Well equities and bonds will get crushed
Commodities well generally keep up with the spike in prices
causing the fed raised rates in the first place So
they're a good hedge for most investment portfolios And not
all of them are great forever like check out riel
Inflation adjusted oil prices the last few decades you had
not a good run Most not all do well though
an oil will likely have its day in the sun
again At some point you lan When in doubt remember
what kim kardashian and warren buffett said A good asset
is hard to find and a hard asset is good
to find But we won't tell you who said which
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