Capital Dividend

Dividends are payments a business makes to their investors (shareholders). The frequency of the payments can vary, and usually you'd only see this with established businesses. New businesses are mostly focusing on keeping the lights on...making investors wealthy isn't their immediate goal.

The key to this particular type of payment is where it comes from. Businesses can pay their investors dividends from their earnings, or from shareholders equity (paid in capital). Shareholders equity is the net of the whole shebang...the business's total assets less the total liabilities.

Capital dividends come from the paid in capital. Because it's "paid in" capital, these dividends are not usually taxable because it's looked at as the company returning the money the investor already put in (it's not a profit, per se). But, if the company is just returning money, rather than distributing profits, this can mean that the company isn't turning profits...the company may be struggling.

As a side note, if you were wondering, industries that often pay dividends on the regular are oil and gas, banks (really most anything financial), real estate and pharmaceutical.