Dividends are a portion of a company's profits that are paid out to its shareholders. They are typically paid out in cash, although they can also be paid out in the form of additional shares of stock. Dividends can have a significant impact on overall returns for investors, as they can provide a steady stream of income in addition to any capital gains from stock price appreciation.

The payment of dividends is generally seen as a positive sign for investors, as it indicates that the company is profitable and is returning some of its profits to shareholders. However, not all companies pay dividends, and some investors may prioritize capital gains over dividend income, depending on their investment goals and risk tolerance. Ultimately, the impact of dividends on overall returns will depend on a variety of factors, including the investor's individual investment strategy and the performance of the stocks in their portfolio.