Chapter 1 of 10
What is a dividend?
A dividend is your slice of a company's profits, paid out in cash for each share you own.
When a company earns a profit it can reinvest it, or hand some back to shareholders as a dividend. If you own 100 shares and the company pays €0.50 per share, €50 lands in your account — just for holding the stock. Most established companies pay quarterly; some pay monthly or once a year.
Dividend investing is the patient strategy of building a collection of these payers, so a growing stream of cash arrives whether the market is up or down. Your total return is this income plus any change in the share price.
One catch once you hold foreign shares: the company's home country usually keeps a slice of each dividend before it reaches you — often 15% on US stocks, and more elsewhere. So the gross figure a screener quotes isn't quite what lands in your account. Quantic estimates this withholding from where each holding is based and your tax residence, and shows your income both gross and net — the net being what actually arrives — plus where in the world it comes from.
Dividends are never guaranteed — a company can cut or stop them. That's why the later chapters look at how safe a payout is.
Key terms
- Gross vs. net
- Gross is the dividend before tax; net is what actually lands after withholding tax. Quantic tracks both.
- Withholding tax
- When you own a foreign stock, the company's home country usually skims a percentage off each dividend before it reaches you — say 15% on US shares. Quantic estimates this from where each holding is based and your tax residence, so your income reflects what actually arrives. It's the tax withheld at source only — not any tax your own country adds, nor amounts you can often reclaim or credit back under a tax treaty.
- Total return
- Everything a holding earns you — dividends received plus the change in share price — not just the income.
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