Tuesday, April 23, 2013
Top 30 Best Dividend Yield Counter
Definition of 'Earnings Per Share - EPS'
The portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability.
Calculated as: (Net Income - Dividend on preferred stock) / Outstanding shares
Two companies could generate the same EPS number, but one could do so with less equity (investment) - that company would be more efficient at using its capital to generate income and, all other things being equal, would be a "better" company
Definition of 'Dividend Yield'
A financial ratio that shows how much a company pays out in dividends each year relative to its share price. Dividend yield is a way to measure how much cash flow you are getting for each dollar invested in an equity position. Investors who require a minimum stream of cash flow from their investment portfolio can secure this cash flow by investing in stocks paying relatively high, stable dividend yields. In the absence of any capital gains, the dividend yield is the return on investment for a stock.
Calculated as: Annual dividend per share/ price per share
Definition of 'Price-Earnings Ratio - P/E Ratio'
The P/E is sometimes referred to as the "multiple", because it shows how much investors are willing to pay per dollar of earnings.
Calculated as: Market Value per Share/Earnings per Share (EPS)