Dividend Vision Academy
Dividend Terms
The vocabulary of dividend investing, explained. From ex-dividend dates to return of capital, these guides define the terms you'll meet on every fund page and dividend announcement — so the fine print stops being a mystery.
Dividend Terms
Distribution Coverage & Income Sustainability
Distribution coverage measures what a fund actually earns against what it pays out. It is a key sustainability check on a big yield when interpreted for the fund structure — persistent under-coverage can warn that a payout is vulnerable.
Dividend Terms
Distribution Rate
Distribution rate is a fund's most recent payout, annualized and divided by its price. It shows the headline yield income investors see, but it can hide return of capital and option premium rather than pure income.
Dividend Terms
How to Read a Section 19(a) Notice
Learn what a 19a-1 notice says about income, gains, and return of capital—and why the final Form 1099-DIV may look different.
Dividend Terms
Dividend Cuts vs Distribution Cuts
A company cutting its regular dividend and a fund lowering its distribution can look identical on a payout chart, but the causes may differ. One can signal business pressure or a policy change; the other may reflect a fund's payout formula — and telling them apart is a core income-investing skill.
Dividend Terms
Dividend Growth
Dividend growth is the rate at which a company or fund raises its payout over time. For long-term income investors, a steadily rising dividend usually builds more income and wealth than a high but static yield, because the payout compounds and your yield on cost climbs year after year.
Dividend Terms
Dividend Payout Ratio
The dividend payout ratio compares dividends with earnings. Learn its formula, why negative earnings need special handling, and how cash flow and REIT measures add context.
Dividend Terms
Dividend Yield
Dividend yield compares annual dividends with the share price. Check the calculation period, payout definition, and total return before comparing investments.
Dividend Terms
Ex-Dividend Date
The ex-dividend date is the trading cutoff for a stock or ETF payment. Learn who gets paid, how T+1 settlement works, and which exceptions to check.
Dividend Terms
Forward Yield vs Trailing Yield
Forward yield annualizes the latest declared payout, while trailing yield looks backward at distributions actually paid. The difference can reveal growth, cuts, or irregular payouts.
Dividend Terms
Irregular Fund Distributions: Measure Payouts Without Guessing
Separate regular, variable, special, and skipped payments before calculating fund yield.
Dividend Terms
Managed Distribution Policies: Targets, Resets, and Trade-Offs
Understand fixed, percentage-of-NAV, and variable payout policies without mistaking them for earned yield.
Dividend Terms
Net Investment Income: What a Fund Earned Before Its Payout
Read fund net investment income, per-share results, and coverage without confusing accounting income with total return.
Dividend Terms
Preferred Stocks
Preferred stocks are a hybrid between a bond and common stock — they pay a fixed dividend, sit above common shares in the capital structure, and behave much like bonds when interest rates move.
Dividend Terms
Why High Yield Doesn't Mean High Income
A headline yield is a rate, not your income. Your actual income is that rate multiplied by a capital base that must hold up — so a 12% payout on an eroding NAV can pay less over a decade than 8% on a stable one.
Dividend Terms
The Yield Trap
A yield trap is a high dividend yield created by a collapsing share price or an unsustainable payout, not by genuine income power. It lures investors with a big headline number right before the dividend gets cut and the price falls further.
Apply what you've learned
Put these Dividend Terms concepts to work — research candidates, then run the numbers.