Companies that pay dividends tend to be established with a stable history. As the business grows, management can choose to pay out a dividend to shareholders as an incentive to hold the stock.
Many high growth companies don't pay dividends at all because they have internal projects that they'd rather invest in growing the business.
Many investors feel that dividend companies are essential to a well-balanced portfolio.
The dividend yield is a normalized measure used to compare dividends, per dollar invested, across different companies.
Dividend Yield = Annual Dividend / Stock Price