[header] How to invest in dividend stocks [title] Learn how dividend stocks produce yields. [step] A stock's return consists of both share-price growth and dividend yield. For example, a company that pays a 5% dividend yield in a given year and appreciates in share price by 5% that same year provides an annualized 10% pre-tax return to stockholders. 
High quality (dependable growth) is necessary to ensure that the dividend payout will be consistent (or even increase) year after year. [substeps] Dividends are typically paid by mature companies with stable earnings.