So doesn't this mean these companies are essentially getting free money?

No. If a company decides to list on the stock market (to raise money that they can invest to grow their business), it's called an initial public offering (IPO). Let's say one share is $10 at the IPO and you buy 10. They get $100 and you get 10 shares in the company. The $100 is theirs to spend as they wish - it doesn't belong to you anymore because they gave you 10 shares in exchange.

If the company has had a good year, they might decide to pay a 50 cent dividend per share to reward their shareholders. So as you have 10 shares, you would get a $5 dividend (and you still own the 10 shares). Next year, they might do the same, or even pay a bigger dividend per share (or they might suspend the dividend if they are struggling). Any dividend payments count towards your overall return for investing in the company.

A few years later, you might decide to sell your shares for whatever reason. Hopefully, the share price will have increased in value by then to reflect the success of the company. Someone else comes along and wants to buy in because they like the business and think it will grow more, so you sell them your 10 shares for $20 each. So you receive $200 for the shares (double what you paid) and they receive the 10 shares in exchange (which entitles them to any dividends from now on). Note that this is a deal between you and the new shareholder - the company does not see any of this money because it's nothing to do with them anymore.