What's the difference between a cash dividend and a stock dividend?

A cash dividend pays you actual money, usually deposited into your brokerage account, that you can spend, reinvest, or move elsewhere. A stock dividend instead gives you additional shares of the company rather than cash, increasing your share count without changing the total value of your position at the moment it's paid, since the price adjusts down proportionally. Cash dividends are far more common and are what most people mean by 'dividends.' Stock dividends are relatively rare and are sometimes used by companies that want to reward shareholders while conserving cash. From a tax standpoint, cash dividends in a taxable account are generally taxable in the year received, while typical stock dividends usually aren't taxed until you sell the extra shares. Most index-fund investors deal only with cash dividends.