Which two main ways can investors earn money from corporate stocks?

Investors primarily earn money from corporate stocks in two main ways: dividends and capital gains.

Dividends are payments made by a corporation to its shareholders, typically out of its profits. This provides investors with a direct return on their investment relative to the number of shares they own. Companies that are profitable and generate cash often distribute a portion of these earnings to shareholders as dividends, offering a reliable source of income.

Capital gains occur when the price of a stock increases and the investor sells it for more than what they initially paid. For instance, if an investor buys a stock for $50 and later sells it for $70, the $20 difference represents a capital gain. This profit reflects the market’s appreciation of the stock's value, often influenced by the company's performance, market trends, and economic factors.

Both dividends and capital gains are essential to an investor's overall return on their investment in corporate stocks, as they represent the two primary forms of profit generation from equity ownership.