Investing in dividend-paying stocks is one of the easiest ways to start raking in passive income. The tricky part? Deciding which stocks to invest in and how long it'll take to see some solid cash roll into your account.

One strategy is to start researching companies you are already familiar with, like Nvidia (NASDAQ: NVDA). The iconic chipmaker has a market cap of over $3 trillion and a spot among the "Magnificent Seven" stocks. Plus, Nvidia rewards loyal investors with a dividend.

All told, the dividend yield probably won't have income investors jumping for joy -- it's a paltry 0.02%. However, paying dividends says something about the company's confidence. It's a small sign that they believe in their financial stability, which means those cash flows could keep coming in.

Nvidia is not your ordinary dividend stock, though

Brace yourself: Nvidia's quarterly dividend payout is a mere $0.01 per share, adding up to just $0.04 annually. And unless the company cranks up the payout, we could be looking at the same amount in 2025. Not exactly a jackpot for income investors, but here's some perspective:

• Stock splits: Nvidia pulled off a 10-for-1 stock split back in June, which means each share got split into 10. Adjusted for this, that $0.01 per share is like getting $0.10 per share before the split. So, the payout appears smaller per share but is proportionate to the total value held.

• Dividend increases: Companies can boost their dividends at any time, which can increase your payout. For example, back in May, Nvidia raised its quarterly cash dividend by 150%, from $0.04 to $0.10 per share.

• Growth potential: Instead of paying out more in dividends, Nvidia funnels cash into research, development, and expansion in artificial intelligence and computing. If you can stomach the stock's ups and downs, you might ride its long-term growth.

So, while Nvidia's dividend is unimpressive, its growth story has investors drooling. If you're hunting for a company focused on future gains rather than massive payouts today, Nvidia should definitely be on your watchlist.

Should you invest $1,000 in Nvidia right now?

Before you buy stock in Nvidia, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Nvidia wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $867,372!*

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