Stock Dividend

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DEFINITION of 'Stock Dividend'

A dividend payment made in the form of additional shares, rather than a cash payout.

Also known as a "scrip dividend."

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BREAKING DOWN 'Stock Dividend'

Companies may decide to distribute stock to shareholders of record if the company's availability of liquid cash is in short supply. These distributions are generally acknowledged in the form of fractions paid per existing share. An example would be a company issuing a stock dividend of 0.05 shares for each single share held.

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RELATED FAQS
  1. Do stock splits and stock dividends affect stockholder equity?

    Stockholders' equity represents the capital portion of a company's balance sheet. The stockholders' equity can be calculated ... Read Full Answer >>
  2. How can stock dividends provide protection against inflation?

    Stock dividends protect against inflation by providing tangible returns that supplement capital returns from rising stock ... Read Full Answer >>
  3. Which is better a cash dividend or a stock dividend?

    The purpose of dividends is to return wealth back to the shareholders of a company. There are two main types of dividends: ... Read Full Answer >>
  4. Does a stock dividend dilute the price per share as would a forward stock split?

    Every corporation has the same goal in mind: to maximize shareholder wealth. This goal is fulfilled in two different ways, ... Read Full Answer >>
  5. I would like to invest in a dividend-paying stock. How can I find out which stocks ...

    There are several accessible sources to help investors identify dividend-paying stocks. Here are a few we can recommend:   Generally, ... Read Full Answer >>
  6. How do dividends affect retained earnings?

    When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>

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