In Switzerland, a dividend stock is simply a dividend payment that is fulfilled via shares rather than a cash payment. Normally a dividend stock is chosen by a company in the event that stockholders wish to 'cash out' their investment returns, and the business holding the stock does not currently have the cash to return to the shareholders. Simply put, its a stand-in in place of cash.
It is also a good point to make that although a dividend stock is normally reserved for companies to utilise in the event they don't have sufficient cash, it can also be used when there is cash available but the business has planned on reinvesting the money. This decision is normally made by company management.
A large benefit to dividend stocks is that the stocks themselves are not taxed. But, once a holder decides to sell those stocks, they are subject to tax. You can speak to our consultants
for more in-depth information on this, as well as which tax percentage stocks will be subjected to.