ilmscore | Prediction Details
"now again not every company pays out a dividend and the reason why is because for a company to pay out this dividend they have to have a big profit so now when a company makes a profit at the end of the year there's three things that they can do with this cash number one is they can save this money in case of an emergency number two is they can reinvest this money back into the company or number three is they can just give it away to you one of the shareholders one of the owners now when it comes to saving the money in a company you got to think from the perspective of a business owner if a company makes a hundred million dollars of profit and they kept a hundred million dollars in their bank account well that's dead cash sitting there not every company wants a ton of dead cash sitting there because the 100 million dollars isn't generating a return for the company companies want to do something with their money or at least give this money to their owners and so if a company has a big enough bank account or a big enough savings account they might not want to save more money which then brings us to option two which is reinvest the money back into the company now if it's a smaller startup Growth Company you bet they're going to want to invest all of this money maybe and some more through debt and other investment money back into the company because they want to grow bigger they want to expand their market share they want to be a larger company and when a company is trying to grow they're going to be investing everything they can to open these doors open new manufacturing plans open new research and development facilities that way they can keep expanding and growing their market share but when a company becomes even bigger and now you're a much larger conglomerate and you don't really see that opportunity to keep investing and growing as quickly now you might not want to reinvest all this money back into the company which leaves now this cash back in the bank account and if you don't want to just save it well then you can give this money away to the shareholders people like you who own a piece of the stock now this is called a dividend and companies that pay a dividend generally pay out this dividend quarterly meaning every three months so now if you buy a stock that's paying a dividend that means you're going to get a cash payment every three months for doing nothing except owning the stock"
By Minority Mindset | October 1, 2023 | Pending
From video
The Secret To Actually Earning Passive Income | Jaspreet Singh 00:08:01 - 00:09:59
Interpreted Prediction
Companies that generate significant profits may distribute a portion to shareholders as dividends, typically paid quarterly. This is an alternative to reinvesting profits for growth or holding cash reserves. Companies that are larger conglomerates and have fewer high-growth reinvestment opportunities are more likely to pay dividends.

Prediction Details

Topic
Dividend Paying Stocks

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