eToro Post a Helpful Guide to Dividends

eToro Post a Helpful Guide to Dividends

If you were looking to do some trading this week, eToro have a helpful guide to help you understand one of the more frequently occurring rewards for traders, dividends. This content does not apply to US customers.

As a platform with multi-faceted trading abilities, eToro always aims to provide their traders with guides that can assist them. With this considered, this guide to dividends will be especially helpful if you are interested in trading stocks – as these are where they are most commonly found. The concept of dividends is fairly simple. In a nutshell, they are a reward from a company to a stockholder for choosing to invest and own part of the company. These rewards are typically a percentage of the company’s profits.

67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Cryptoasset investing is unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.

As an investor or stakeholder in the company, you are partly an owner and therefore are entitled to the profit. In many cases though, this profit would not be regularly paid out, as it would make more sense, particularly for growing businesses, to reinvest the profit into the company or use it to further the company’s ventures. This means that if the company grows, your investment will be worth more, which is, of course, beneficial to you as an investor.

However, when that company you have invested in grows to a particular size, or you simply have invested a lot in a big company, they pay out a share of these profits- these are known as dividends. The value of these dividends and the frequency in which they will be shared out will depend on the specific company. They can happen on a quarterly, bi-yearly, or yearly basis. This is scheduled by the company in their earnings reports and this will detail the particulars of the dividends if there are any.

If dividends are given out, they will be reflective of the stakes you own, with the amounts distributed- in the form of cash or stock- being reflective of the number of shares you own. eToro shared this example, “If Apple announces a dividend of $0.8 per share, a stockholder with 50 shares will receive a $40 dividend.” And so, the more stocks you own, the more dividends you will stand to earn if and when the company decides to distribute them.  

As such, dividends can be thought of being a sort of bonus for investing and showing belief in the company that does not affect your existing investment, which would stay the same. The dividends working as a reward on top of the capital gains earned by your stock’s value increasing. Due to this, dividends are becoming more frequently sought after among the investor community – particularly, according to eToro, those with a “low-risk appetite”, who “are looking for long-term growth”, and who “base at least some of their stock portfolio on dividend-yielding stocks.”

The question now would be, what should you do with your dividends? Well, the size of the dividends factors into deciding exactly what options are available to you. However, eToro highlight one avenue available to you, which is to reinvest the dividends. This will appeal to a number of investors who have a bigger appetite for the risk and are looking to use dividends as a means to further grow their portfolio and use them as a means of steady income.

This can be easily managed thanks to the use of eToro’s DividendGrowth Portfolio, which has been designed reflective of companies that have been giving out regular dividends over the past 20 years. These include the likes of Pepsico, IBM, and McDonald’s, with the following criteria taken into account:

  • Market cap – looking for solid companies.
  • Beta – low market volatility.
  • 5-year dividend growth average – looking at consistency over the medium term.
  • Previous year dividend yield – short term dividend performance.

The portfolio is described as a “well-rounded, long-term and low-risk investment solution for dividend-hungry investors” so if you are keen to get more closely involved with dividends that you should hunt this out at eToro.

Ready to join our tribe?

We respect your email privacy

Subscribe now to recieve exclusive updates and offers!

Recently Similar News

Latest Guides

Latest News

ChangeNOW,Decentralised,Fraud

ChangeNOW’s AML Action Lead To The Return Of $15M COMP

Earlier this week, ChangeNOW announced that it was able to identify and return 45,505 COMP back to Compound. The estimated value of this recovery is around the $15m mark. This remarkable achievement is further proof of the effectiveness of the exchange’s Anti-Money Laundering (AML) procedures. In an announcement made on ChangeNOW’s website, the company provided […]

6 October, 2021
CFD Trading Platform,eToro,Trading

eToro Lowers The FTD Minimum Across Several Countries

eToro, the social trading and multi-asset platform, has decided to lower the minimum first time deposit, or FTD. Until further updates, users who sign up today using the link below will be able to fund their trading account with as little as $50. This offer is only valid to users in selected countries. To participate […]

24 September, 2021
ChangeNOW,Cryptocurrency,Investment

ChangeNOW Launches The NOW Tracker App

The young, but fast-growing online cryptocurrency exchange, ChangeNOW, has just announced the release of its latest product. The NOW Tracker is a free asset management app that lets users keep track of their coins and tokens across different wallets. Available on Google Play and the App Store, NOW Tracker is flexible and functional. This solution […]

9 September, 2021
eToro,Investment,Trading

eToro Becomes An Official Partner Of RB Leipzig

The world’s leading social investment network, eToro, has recently announced a new and exciting partnership. According to an announcement on eToro’s Twitter page, the company has become the latest partner of the German football team, RB Leipzig. A two-year partnership agreement has been signed between the parties. Running until 2023, this agreement can be extended […]

24 August, 2021
Binance,Bitcoin,token

PSG’s Messi To Receive Part Of His Salary In Cryptocurrency

The Argentinian footballer, Lionel Messi, has made headline news several times in the past few weeks. Following his surprise departure from FC Barcelona, the player confirmed that he will be joining Paris Saint-Germain FC. The move was significantly newsworthy but got even more interest when it was announced that part of the footballer’s salary will […]

23 August, 2021
Blockchain,Casino,Ethereum

KingTiger Casino Announces Shut Down

KingTiger Casino has announced that it has ceased all operations until further notice. According to its website, the casino has had to “temporarily close” due to Ethereum network congestion. It is not yet clear if and when this online Bitcoin casino will reopen. Meanwhile, we invite you to check out other Bitcoin casinos from our […]

12 August, 2021
Binance,Casino,Cryptocurrency

CryptoCasino Announces Temporary Close

CryptoCasino has stopped operating until further notice. According to a landing page on their website, the casino is undergoing an update. There is no information about when the casino will reopen or the reason why an update required the website to shut down temporarily. Players who hold a crypto wallet account with CryptoCasino need not […]

11 August, 2021
Binance,Bitcoin,SEPA

Binance Suspends SEPA Inward Payments Until Further Notice

Binance Suspends SEPA Inward Payments Until Further Notice Binance has just announced that it has temporarily stopped all incoming SEPA payments. As a result, users will no longer be able to deposit euros using the primary European payments network. The world’s largest cryptocurrency exchange did not provide any specific information regarding the reason behind this […]

12 July, 2021