When a company generates a profit, management has the choice to reinvest that cash into the business (for rapid growth) or pay out a portion as a dividend to shareholders. Dividends are almost always paid in cash directly to your brokerage account.
Dividends are highly prized by income investors, retirees, and conservative allocators, as they provide a tangible, predictable cash stream regardless of the daily fluctuations of the stock market.
Total return historically relies heavily on the reinvestment of dividends. By automatically buying more shares with your dividend payouts through a DRIP (Dividend Reinvestment Plan), the compounding effect on long-term wealth is massive.