stock dividend

Stock Dividend

A dividend payment made in the form of additional shares, rather than a cash payout.

Investopedia Commentary

Companies may decide to distribute stock to shareholders of record if the company's availability of liquid cash is in short supply. These distributions are generally acknowledged in the form of fractions paid per existing share. An example would be a company issuing a stock dividend of 0.05 shares for each single share held.

Also known as a "Scrip Dividend."

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See also: Dividend Clawback, Dividend Payout Ratio, Dividend Yield, DRIP, Ex-Dividend Date, Record Date, Shareholder

stock dividend

A dividend made up of shares of the paying firm's stock. A stock dividend is often used in place of or in addition to a cash dividend if the firm wishes to conserve cash. Unlike a cash dividend, a stock dividend is usually not taxable to the shareholder when it is received, but rather when it is sold. Stockholders who are supposed to receive a fractional share will often receive a check for the amount equal to the market value of the fractional share. Payment of a stock dividend is indicated in stock transaction tables in newspapers by the symbols b and t. See also scrip dividend.