Dividend per share (DPS) is calculated by dividing the total dividend payout by the total number of shares outstanding. It is usually paid quarterly to shareholders and is a measure of a company’s profitability. DPS can be valuable to investors, but there is no guarantee of a dividend.
The dividend per share (DPS) is a simple formula that takes the total dividend payout and divides it by the total number of shares outstanding. Shares are good for paying dividends and are made to shareholders of record on a certain date. The more shares outstanding, the less dividend per share can be captured.
This type of dividend is usually paid quarterly, but there is never a guarantee of a dividend. These payments are made not because of debt obligations, but because shareholders have partial ownership of the company and, as such, are entitled to a share of the profits. If there is a non-profitable year or quarter, a company may not have a dividend to issue.
The dividend per share is generally declared quarterly at a meeting of the board of directors or shareholders. Most of the time, after the meeting, it becomes a matter of public record and could stimulate an increase in the value of the shares, especially in the short term. In almost all cases, the company calculates the dividend so shareholders know exactly what is being paid and when it will be paid.
Dividends are very important to some shareholders, as this is one of the main ways to make money in the stock market. In fact, some investors may buy a stock and hold it for a relatively short period of time just to take advantage of this payment. These dividends can be very valuable, especially for those who buy a considerable amount of shares.
It is important to note that a dividend per share is often considered a cumulative annual payment, even though it is paid quarterly. For example, if $1 US Dollar (USD) is paid out each quarter, the annual dividend per share would be $4 USD. However, the company cannot say that this is an annual figure. Therefore, if the investor is doing his research, he should carefully note what the company is defining.
Often this number is a measure of a company’s performance, simply because it indicates how profitable a company is during a quarter or year. Companies often compare performance in each quarter to what you did in the same quarter last year. This may also include a comparison of the previous year’s dividend per share.
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