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Category: Dividend Fundamentals

Core concepts that help investors understand how dividends work and what drives long-term income.

Dividend yield is often the first metric investors look at. But on its own, it says very little about the quality of the income.

The payout ratio shows how much of a company’s earnings are distributed as dividends — and provides an early indication of sustainability.

Growing dividends can be a sign of underlying strength. Over time, they also play a key role in compounding returns.

High yields can be attractive — but sometimes they signal risk rather than opportunity. Recognising a dividend trap is essential.