FTSE 100 dividend stocks

What is the FTSE 100?

The FTSE 100 is a stock market index that measures the performance of the 100 largest companies listed on the London Stock Exchange (LSE) by market capitalization.

The name "FTSE" stands for Financial Times Stock Exchange, which is the company that manages the index. The companies included in the index represent a diverse range of industries, including banking, mining, healthcare, retail, and energy, among others.

The FTSE 100 is often used as a benchmark for the performance of the UK stock market and is one of the most widely followed stock market indices in the world.

What are dividends?

Dividends are payments made by a company to its shareholders as a way to distribute a portion of its profits. And a dividend yield is the percentage of a company's stock price that is paid out as dividends over a certain period of time. A higher dividend yield can indicate a higher payout to shareholders.

When a company generates profits, it has several options for using that money, such as reinvesting it in the business, paying down debt, or returning it to shareholders in the form of dividends “payout to shareholders”. These payments can provide investors with a steady stream of income.

Dividends can be paid out in cash, stock, or other property. Cash dividends are the most common form of dividends and are usually paid out on a quarterly basis, although some companies may pay them on a monthly or annual basis. Stock dividends, on the other hand, involve distributing additional shares of stock to existing shareholders.

The amount of the dividend payment is usually determined by the company's board of directors and is based on various factors, such as the company's earnings, financial position, and growth prospects.

Companies may choose to increase, decrease, or suspend dividend payments depending on their financial performance and other factors. Dividends are typically seen as a way for companies to reward their shareholders for their investment in the company and to attract new investors.

Popular dividend stocks on the FTSE 100 include:

Overall, investing in dividend stocks can be a good strategy for investors seeking a steady stream of income from their investments. However, as with any investment, it's important to do your research and carefully evaluate the potential risks and rewards before making any investment decisions.