Everyone wants to achieve financial freedom and have enough money for themselves. So imagine you are financially free and you own a small piece of a bank.
Each quarter, that bank makes a profit, maybe from loans, fees, or investments. And because you’re part-owner since you own shares, the bank decides to send you a little slice of those profits.
That money they give you.
That’s a dividend.
Dividends are like the financial world’s way of saying, “Thank you for trusting us with your money,” or “Thank you for riding with us.”
What is a Dividend?
A dividend is a portion of a company’s profits shared with shareholders. It’s real money, paid out simply because you own stock in that company.
This could come in two forms:
- Cash (directly into your investment account)
- More shares (so you own even more of the company)
You buy 100 shares of Wema Bank.
Then they declare a dividend of ₦3 per share.
Just like that, you’re credited with ₦300, even if you didn’t sell a thing.
No stress. No trades. Just passive income.
Why Do Companies Pay Dividends?
Not every company pays dividends.
The ones that do are usually solid, stable, and already successful. They’re not chasing growth they’re rewarding loyalty.
They pay dividends to:
- Share profits with investors
- Signal financial strength
- Attract long-term holders, not just hype chasers
Think of companies like Nestlé, GTCO, or Dangote Cement, they’ve been around the block, and they’re not stingy.
When Do You Get Paid Dividends?
Each company sets:
- A declaration date – when the dividend is announced
- A record date – the deadline to be a shareholder and qualify for payment
- A payment date – when your money actually lands
If you’re holding the stock by the record date, the dividend is yours.
Why Should You Care About Dividends?
Because dividends do three big things:
- They put cash in your pocket, whether the stock price goes up or not
- They can be reinvested, compounding your wealth over time
- They offer stability, especially during shaky markets
It’s like owning a rental property: even if the value doesn’t rise fast, the rent (dividends) keeps coming in.
When Should You Look for Dividend Stocks?
- When you’re building a long-term portfolio
- When you want steady income without selling your stocks
- When you’re investing in long term, not just chasing volatility
- When you want a buffer during market dips
Let’s say you’re using the Trove app and looking beyond hype stocks. You want investments that work quietly in the background.
Dividend-paying companies do just that for you.
Conclusion
Dividends are the investor’s sweet bonus. They reward patience, loyalty, and long-term thinking. You don’t need to chase price jumps to grow your money. Sometimes, the best play is the quiet stream of steady returns.
So next time you’re investing on Trove, don’t just look for stocks that will rise. Also look for the ones that will pay while you wait but don’t forget to do your research before investing in any stock.
Because smart investors don’t just look for growth, they look for income and consistency.
