Dividend investing is an investment strategy focused on acquiring stocks that regularly pay out a portion of their earnings to shareholders in the form of dividends. For income-focused investors, dividends provide a consistent stream of passive income, which can either be withdrawn or reinvested to buy more shares, thereby compounding returns. Companies that pay dividends are often mature, established businesses with stable earnings and strong cash flows, making them attractive to investors seeking stability and income rather than aggressive growth. Key metrics for dividend investors include dividend yield (annual dividend per share divided by stock price), which indicates the percentage return on investment from dividends, and dividend payout ratio (dividends per share divided by earnings per share), which shows the proportion of earnings paid out as dividends, providing insight into the sustainability of the dividend. While dividend stocks may offer less capital appreciation potential compared to growth stocks, their regular payouts can provide a cushion during market downturns and contribute significantly to total returns over the long term, making them a cornerstone of many income-oriented portfolios.