Homemade Dividends


DEFINITION of 'Homemade Dividends'

A form of investment income that comes from the sale of a portion of shares held by a shareholder. This differs from dividends that shareholders receive from a company according to the number of shares the shareholder has.

BREAKING DOWN 'Homemade Dividends'

The existence of homemade dividends is the reason some financial analysts believe that looking at a companies dividend policy is not important. If investors desires an income stream they will either sell their shares when they want the income or they will invest in other income-generating assets.

  1. Dividend

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  2. Income

    Money that an individual or business receives in exchange for ...
  3. Portfolio Income

    Income from investments, dividends, interest, royalties and capital ...
  4. Dividend Policy

    The policy a company uses to decide how much it will pay out ...
  5. Synthetic Dividend

    A type of incoming cash flow that an investor creates with certain ...
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    A principle that defines the relationship between the price of ...
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  1. What is the incentive to buy a stock without dividends?

    While dividends are the only direct income (money paid out), the total return of holding, a stock is the dividend plus the ... Read Full Answer >>
  2. Do mutual funds pay dividends?

    Depending on the specific assets in its portfolio, a mutual fund may generate income for shareholders in the form of capital ... Read Full Answer >>
  3. How often do mutual funds pay capital gains?

    The frequency with which mutual funds pay capital gains varies. However, funds that generate a profit within a given year ... Read Full Answer >>
  4. How can I find tax-exempt mutual funds?

    Tax-exempt mutual funds can be found at many prominent investment firms. Most mutual funds offer a variety of investment ... Read Full Answer >>
  5. Are mutual funds considered equity securities?

    Like stocks, mutual funds are considered equity securities because investors purchase shares that correlate to an ownership ... Read Full Answer >>
  6. Can dividends be paid out monthly?

    Though it is more common for dividends to be paid quarterly or annually, some stocks do pay monthly dividends. Dividends: ... Read Full Answer >>

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