Let’s say you buy 1,000 shares of XYZ company, and its paying out a cash dividend of .25 cents per share per month. That means you would be receiving an income of $250 per month from that dividend payout.
The thing about dividend stocks though, is that they are more established companies that are not in “growth mode”. So instead of reinvesting the profits back into the company, like growth stocks do, they distribute it to the shareholders.
There are many index funds (ETFs or mutual funds) that have sold some of their holdings and returned the profits to the shareholders, rather than investing them. This means that they aren’t indexed to stocks with dividends.