– Crypto staking is essentially a modern day hybrid of dividends.
– Unlike regular stocks, dividend-paying stocks payout cash to their shareholders quarterly.
What Are Dividends
We love it when our stocks pay us on the regular, and we bet you will too! Dividend-paying stocks are the best. They’re profits delivered into your (digital) pockets quarterly.
A dividend is a portion of a company’s profit that is paid to its shareholders. The value per dividend is on a per-share basis and is paid equally amongst all shareholders (per stock class: preferred, common, etc.). The company’s Board of Directors determine how much of the profits will be distributed amongst its shareholders.
The Dividend Payout Ratio (DPR) determines how much of a company’s earnings are paid to its shareholders. Calculate the DPR by dividing total dividends by net income. Dividends are typically distributed quarterly.
What Are the Types of Dividends
There are different types of dividends—such as stock, assets, etc—but the most common is cash. A cash dividend is paid to the shareholders via check or wire transfer.
Crypto staking is essentially a modern day hybrid of dividends. When you buy and stake a crypto token like Ethereum (ETH), Cosmos (ATOM) or Binance Coin (BNB), you are buying stock in that crypto company and you will receive profit, as an APY, if you stake the tokens.
We stake ETH, ATOM, BNB, among others, on crypto exchanges and DeFi platforms. We buy those tokens when the market dips, and then we stake them for long-term passive income.
Why Invest in Dividends
Dividends generate passive income for shareholders. They also incentivize shareholders to reinvest in the company by purchasing more stock via dividend reinvestments and incentivize non-shareholders to purchase stock as a long-term investment.
Best Dividend Stocks and High-Yield Dividend Stocks
We invest in dividends through Fidelity and Interactive Brokers, but do your own research to see which broker you like. Dividend yields vary per company and its performance, so the best way to find the latest high-yield dividend stocks is to research via brokerage firms, such as:
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