Investment basics: what is a dividend and for whom is it suitable?

Last time I dealt with the biggest fundamental - what is a stock per se. Investment basics: what is a stock anyway? In that article, I made a passing reference to dividends, which I'd like to cover more in this article. I'll also try again to explain mostly things that I know gave me a hard time in the early days. It is not always the case that a person with experience realizes that a beginner can be a bit confused about other things. Let's get to it.

What is a dividend?

Again, I'll start with some vague definition from the internet:

A dividend is the distribution of an issuer's profits to its shareholders and is determined by the company's board of directors. Dividends are often paid quarterly and can be paid in cash or reinvested in additional shares.

The dividend yield is the dividend per share and is expressed as a ratio of the dividend to the price as a percentage of the company's share price, for example 2.5%.

Ordinary shareholders of…