Dividends provide 3 essential income functions...

current income

Dividends provide the shareholder with an immediate return on their investment.  The dividend payment is the shareholder's allocation of profits.  Most U.S. based companies pay dividends on a quarterly basis. 

rising income

The best dividend paying companies have a history of raising their dividend payments to shareholders on a regular basis.  In fact, there are more than 50 companies that have raised their dividend payment to shareholders for more than 25 consecutive years.

re-investment

The shareholder has an option to either receive the cash dividend or re-invest the dividend to accumulate more shares.  Re-investment adds shares which adds to the amount of the next dividend payment.