In by Kristia van Heerden

When a listed company shares profits with its shareholders, the cash amount paid to the shareholder account is called a dividend. It’s usually expressed as cents per share or, in the case of ETFs, cents per unit. The more shares or ETF units you have, the more dividends you receive. Dividends make compounding possible in share investments. When you use the dividends you receive to buy more shares, you earn dividends on dividends. Once you retire, you can use dividend payments as income.