Dividend investing provides investors with steady cash flow over the long terms. Dividend stocks gives us a great hedge against inflation as they provide both appreciation and capital gains to offset rising costs.

A dividend is the distribution of a company's earnings to its shareholders and is determined by the company's board of directors.

Most companies pay dividends every quarter (four times a year). They often pay after announcing their quarterly financial report. However, dividend payout frequency may vary from company to company. Some companies may pay annually or biannually or monthly or no set schedule (irregular dividends).

Dividends may be paid out as cash or in the form of reinvestment in additional stock.

The dividend yield is the dividend per share, and expressed as a percentage of a company's share price.

Shareholders of dividend-paying companies are eligible to receive a distribution as long as they own the stock before the ex-dividend date.

Dividend payments impact share price and the price may rise on the announcement approximately by the amount of the dividend declared and then decline by a similar amount at the opening session of the ex-dividend date.

Dividends form an important part of the ‘total return’ of a stock investment.

Using the dividend income to buy additional stocks or receiving stocks as dividend also allows us to build the value of our holding even further, through harnessing the power of compounding over the long term.

I have created a diversified portfolio that has given me a minimum 4% dividend a year which was the reason I have started to invest in stocks in 2021 rather than putting my money in the banks before the aggressive interest rate hikes in 2022.

I have been continuously receiving dividends regularly every month which is an excellent passive income source. The dividends also help me to recover some of my losses from the stock investment as mentioned in my Investment Review article on 24 Dec 22.

The table below shows some of my stocks that distribute dividends.

Singaporeans investing in the US market are taxed 30% on our dividends as the U.S does not have a tax treaty with Singapore.