Where to find annual dividend

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Image source: Getty Images. The Motley Fool. Join Stock Advisor Discounted offers are only available to new members. However, before making an investment in a dividend-paying stock, investors should carefully look into several other aspects, including growth in dividends paid, the financial strength of the company, and future growth prospects.

Dividends are usually paid in cash quarterly to shareholders, but there are cases where dividends are paid monthly or annually so the calculation will be accordingly. A good dividend yield depends on various market factors. Usually, the dividend yield is calculated annually, the calculation can be converted to months or quarters find the formulas above. The dividend yield is how many percent of the share price is divided as a dividend, the payment ratio is what percentage of the share earnings are divided as dividends.

News Smart Portfolio Markets. Top Stocks. Daily Feeds. Top Smart Score Stocks New. Research Tools. Dividend yield equals the annual dividend per share divided by the stock's price per share. Dividend yield is a method used to measure the amount of cash flow you're getting back for each dollar you invest in an equity position. In other words, it's a measurement of how much bang for your buck you're getting from dividends. The dividend yield is essentially the return on investment for a stock without any capital gains.

Assuming all other factors are equivalent, an investor looking to use their portfolio to supplement their income would likely prefer ABC's stock over that of XYZ, as it has double the dividend yield. Investors who need a minimum cash flow from their investments can secure it by investing in stocks paying high, stable dividend yields. Older, well-established companies usually pay out a higher percentage in dividends than younger companies, and older companies' dividend history is also generally more consistent.

Keep in mind that paying out high dividends can also cost a company growth potential. Every dollar a company pays out to its shareholders is money that the company isn't reinvesting in itself to make capital gains. Ask yourself why a yield might be high; then investigate a little.

Sometimes a high dividend yield is the result of a stock's price tanking. If the company is suffering financial woes, you might want to steer clear of this investment, but do your homework to be sure. Background influences such as an ailing economy can be an influence as well.

Homebuilder stocks plummeted during the recession , for instance. This type of situation has no quick fix, but other issues might. The company could rebound—even sooner rather than later—so it's important to understand what might be causing declines.

You'll also want to be aware of the type of company you're investing in, because some dividend yields are unnaturally high.

These types of companies are required by law to distribute a very significant percentage of their earnings to shareholders, resulting in higher dividend yields. Some dividend investors love them. This gives Company R a dividend yield of 0. Calculating dividend yield can help your company determine where your investments are better served.

This is because you'll be able to compare a dividend yield to that of other stocks. Ultimately, the greater the dividend yield, the better. Though calculating the dividend yield can be helpful, some companies may face issues if the dividend yield is the sole decision-maker for their future investments.

To avoid problems, it's important to consider whether or not the dividend yield has been consistent in the past. Also, a sudden change in stock will affect the dividend yield. Lastly, if a company is giving out too many dividends, it could hinder its ability to grow.

To ensure you avoid any pitfalls, consider using a financial advisor. Find jobs. Company reviews. Find salaries. Upload your resume. Sign in. Career Development.