Dividends are a portion of the profits that certain companies pay out to investors.
Usually, this is done on a quarterly basis. However, there are some stocks out there that pay dividends every single month.
Not all companies pay dividends, but many do. There's no requirement out there that says a company has to issue dividends to shareholders.
It is often the larger, well-established companies that pay dividends and have for decades.
Think of companies like Coca-Cola, Walmart, and Procter & Gamble. These companies have been paying their investors dividends for decades.
Some investors choose to invest in these stocks simply because they believe the dividend is nearly guaranteed.
However, keep in mind that a company is not required to pay dividends and it can stop paying them at any time. Though, if a company chose to decrease the size of its dividend or stop paying altogether, many investors would be quite upset and sell.
If you are investing using the Webull app, it's entirely possible that you may earn dividends from a stock or ETF that you hold.
You might be wondering, what exactly happens with those earned dividends on Webull?
In this article, we will be explaining exactly what happens with dividends earned within the Webull app.
If you prefer, we have a video explaining Webull dividends below, or feel free to continue reading!
You basically have two options with what to do with your earned dividends.
Reinvesting your money allows you to earn compound interest.
Unless you are planning on retiring and living off the dividends, most people instead decide to reinvest them. However, at this time Webull does not have an automated dividend reinvestment feature.
Instead, you will have to invest them on your own.
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Some investing platforms will reinvest your dividends for you automatically whenever they are received.
This is known as a Dividend Reinvestment Program or DRIP.
Webull does not currently offer automatic reinvestment.
Currently, investors who receive dividends on Webull will see a dollar figure arrive in their cash account on the platform. Users must then conscientiously determine how to use this money. They can then either reinvest it or withdraw it, as stated earlier.
However, Webull does support fractional shares. This makes reinvesting dividends easier, as you don't need to worry about having enough to purchase a whole share.