Stock Dividend

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What is a 'Stock Dividend'

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

Also known as a "scrip dividend."

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. Which is better a cash dividend or a stock dividend?

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  2. What is the difference between the dividend yield and the dividend payout ratio?

    Learn the differences between a stock's dividend yield and its dividend payout ratio, and learn why the latter might be a ... Read Answer >>
  3. Can dividends be paid out monthly?

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  5. What causes dividends per share to increase?

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