Dividends are payments made by companies as a reward to shareholders for their investment. They are essentially a cut of the profits.
Remember, when you own shares you don’t just own them in the hopes of their price going up, you own a small share (hence the name) of the company.
While there are lots of companies that pay dividends regularly, no company is obliged to do so. Larger established companies usually pay predictable and regular dividends, whereas smaller companies may not pay dividends at all, or as regularly, as they are still in a growth phase and may not have predictable profits.
The timing of how often dividends are paid varies from one company to another. In general, dividends are paid quarterly, though some pay annually, and some are even known to pay monthly.
The "last date to trade" when relating to dividends means this is the last day for your name to be on the register as a shareholder in order to receive dividends in that particular stock. Therefore if you want to ensure you receive dividends, you need to be invested and that the shares are in your account (not waiting to be invested as a pending transaction) at this given date before the market closes.
When dividends are distributed, the payments are by default paid into the investors’ available funds. Thereafter, investors can reinvest the funds, let them accrue interest, or withdraw them into their bank accounts. You can also elect to have them automatically reinvested into the company that is distributing them.
