DPS (Dividends Per Share). Fundamental Indicator.
A dividend is a distribution of a part of company’s net income to its shareholders. Usually, it is made in a form of cash, but it also could be in the form of stocks, property and other. Dividends often expressed as dividend per share, that is a total amount of cash that each share receives.
It’s important to know that dividends are taxable. There are three most important dates for dividends: declaration date, ex-dividend date, the payment date:
- Declaration date is the date when company’s Board of Directors declares its intention to pay the dividend.
- The ex-dividend date is the date when stocks that are bought or sold lose their connection with the right to get the most recent dividend. This means that even if stockholder sells his share after ex-dividend date he will receive the most recent dividend never the less.
- Payment date is the date when shareholders of a company will receive a dividend to their brokerage accounts.
Companies usually pay a dividend quarterly, thus, one needs to sum dividend per share that were paid during last 12 month to get yearly dividend per share.
Dividend Yield. Fundamental Indicator.
A financial ratio that indicates how much a company pays out in dividends each year relative to its share price. In other words, it shows what return expressed as dividends an investor will get per each dollar of his/her investment in company’s shares. The dividend yield is represented as a percentage and can be calculated by dividing the dollar value of dividends paid in a given year per share of stock held by the dollar value of one share of stock.
For example, dividend yield for an Apple Inc stocks will be 2.06% = $2.08 (dividends) / $101.12 (share price).
Income investors are particularly interested in stocks of companies that consistently pay dividends with high dividend yield. We offer several reports in our screener with high dividend yield companies:
- Companies with Dividend Yield > 4%.
- Companies with Dividend Yield > 10%.
- And incredible companies with Dividend Yield > 20%.
Good luck in investments!