As we all know, the purpose of an investment company is obvious, which is to benefit. No one will choose to invest in order to lose money. Of course, it is not easy for investors to gain benefits from enterprises. After all, there are also many problems that need to be paid attention to when allocating profits. For example, stock interest and dividends. When investment novices hear these two words, most people's first feeling is that these two are not the same thing. What's the difference? If you need to make a choice between the two ways, which is better?

In fact, in a broad sense, there is really no significant difference between stock interest and dividends, but in a narrow sense, the two are not in the same field. The main difference between stock interest and dividends is that the beneficiaries are different, and the order of profit distribution is separate. The income obtained by shareholders holding preferred shares is called stock interest, while the revenue received by ordinary shareholders is called the dividend. In terms of distribution order, preferred shareholders should rank first in obtaining stock interest. For example, the finance and taxation company decided to distribute a net profit of 10,000 dollars in 2020. At this time, when the finance and taxation company distributes, it can't divide as it wants. It is only in the order prescribed by law. That order is natural that the shareholders who hold preferred shares in the first place can distribute benefits earlier. That is, they can get the company's stock interest, as mentioned earlier. Ordinary shareholders need to spread the remaining profits after distribution to preferred shareholders. Back to the example just said, since the tax company has preferred to distribute the select stock interest of $5000, the profit that ordinary shareholders can distribute is only $5000. Then, of course, the stock interest will be better.

Stock interest is generally paid in two ways: cash dividends and bonus shares. A cash dividend is to pay cash to shareholders, while a bonus share is a way for the company to give shares to shareholders instead of paying cash dividends. Cash dividends refer to shareholders' immediate capital reporting while giving shares provides a relatively long-term opportunity for greater returns. If you want to be more stable after buying shares, I would suggest you choose the first one, namely cash dividends. After all, this is an immediate and attainable benefit, and bonus stock is just an opportunity, an opportunity to obtain higher income or return. Of course, you may get several times more interest than the current income at a certain point in the future, but you also need to bear the risk of uncertainty.

The stock interest is better than dividends because the investors who can obtain the stock interest hold preferred shares, which rank higher when they accept the stock interest. Among the stock interest, prudent investors can choose cash dividends with less risk and more stable income.

（Writer：Laurro）