Earnings Per Share (EPS)
- The earnings of a company divided by the number of shares outstanding.
- Are positive is a company has earnings.
- Will be negative is a company has a loss.
- Negative earnings are necessarily a bad thing. A new company developing a product will have negative earnings until they begin selling the product…maybe even after.
- A company’s dividend yeild is quoted in annual terms (The % you will earn after owning the stock for 1 year).
- The dividend yeild is computed using previous dividend payments throughout the past year.
- Companies can increase or decrease their dividend payment.
- It is best to look at a historical chart of a stock that shows dividend activity to get a sense of the regularity of dividend payments.
- Most companies pay dividends per quarter (others pay by month, bi annually or annually).
- It’s better as an investor to receive dividend payments monthly or quarterly.
- The quoted dividend yeild from companies that have declared a special dividend should be ignored.