A stock dividend, also known as a stock split or bonus issue, is a distribution of additional shares of a company's stock to its existing shareholders. It is usually done by a company to reward its shareholders by increasing the number of shares they hold without changing the overall value of their investment.

In a stock dividend, the company issues new shares to its shareholders based on their existing holdings. For example, if a company announces a 10% stock dividend and you own 100 shares, you would receive an additional 10 shares. The total value of your investment remains the same, but the number of shares you own increases.

Stock dividends are typically expressed as a percentage, such as 5%, 10%, or 25%. The decision to issue a stock dividend is made by the company's board of directors, and it is often done when the company wants to make its shares more affordable to investors or increase liquidity in the market.

It's important to note that a stock dividend does not have a direct impact on the market value of the company or the shareholders' proportional ownership. The stock price of the company is adjusted accordingly to reflect the increase in the number of shares outstanding, maintaining the overall market capitalization of the company.

Shareholders can choose to keep the additional shares received from a stock dividend or sell them on the open market. It's also worth mentioning that the tax treatment of stock dividends may vary depending on the jurisdiction and individual circumstances, so it's advisable to consult with a tax professional for specific guidance

Here are some of the best dividend stocks to buy in 2023:

• IBM (International Business Machines): IBM is a technology company that has been paying dividends for over 100 years. The company has a dividend yield of 4.7%.
  Opens in a new windowBarron's

  IBM (International Business Machines) dividend stock
• Chevron (CVX): Chevron is an oil and gas company that has a dividend yield of 3.7%. The company has been paying dividends for over 100 years.
  Opens in a new windowBloomberg.com

  Chevron (CVX) dividend stock
• EOG Resources (EOG): EOG Resources is an oil and gas company that has a dividend yield of 3.4%. The company has been paying dividends for over 20 years.
  Opens in a new windowDividendMax

  EOG Resources (EOG) dividend stock
• Energy Transfer (ET): Energy Transfer is a pipeline company that has a dividend yield of 7.4%. The company has been paying dividends for over 10 years.
  Opens in a new windowDividendMax

  Energy Transfer (ET) dividend stock
• Lockheed Martin (LMT): Lockheed Martin is a defense contractor that has a dividend yield of 2.7%. The company has been paying dividends for over 50 years.
  Opens in a new windowDividend Investor

  Lockheed Martin (LMT) dividend stock
• Merck (MRK): Merck is a pharmaceutical company that has a dividend yield of 2.6%. The company has been paying dividends for over 100 years.
  Opens in a new windowSimply Wall St

  Merck (MRK) dividend stock
• Air Products and Chemicals (APD): Air Products and Chemicals is a chemicals company that has a dividend yield of 2.6%. The company has been paying dividends for over 50 years.
  Opens in a new windowSeeking Alpha

  Air Products and Chemicals (APD) dividend stock
• Automatic Data Processing (ADP): Automatic Data Processing is a business services company that has a dividend yield of 2.4%. The company has been paying dividends for over 40 years.
  Opens in a new windowDividendStocks.com

  Automatic Data Processing (ADP) dividend stock

These are just a few of the many great dividend stocks to choose from. When choosing a dividend stock, it is important to consider factors such as the dividend yield, the company's financial strength, and its track record of paying dividends.