Investing 102

[GregWeld]

First off -- understand that the dividend is paid as a DOLLAR amount... but the PERCENTAGE of dividend YOU receive is based on your cost. The Dividend is paid as a set amount... your stock cost is fixed... as the Dividend payout grows -- you're getting a higher and higher percentage on your cost basis.

DIVIDENDS are paid every QUARTER. You'll therefore get 4 payouts per year.

Don't forget to multiply the quarterly dividend by FOUR to get the annual dividend payout.


KO - pays .31 per quarter (X's 4 = 1.24 per year) - based on Fridays close that is 2.91%

Mathematically expressed as --- Dividend (annual) divided by the cost basis = a decimal answer. In this case 1.24 / 41.88 = .029608

Move the decimal 2 places.... 2.96%


Your cost of 41.40 makes the dividend 2.995%


You're calculation ANNUAL percentage dividend yield.


Total RETURN --- is the stock price appreciation (if any) with dividends reinvested - over a period of time. Total return - imho - is the most critical thing you can go for with your investments. It's the real return on the money you've invested. If you were lucky enough to see 100% total return in 3 years and then manage to keep that percentage of return going for every three year period --- you can only imagine the growth of your money. Good luck with the kind of return... LOL But it does happen!!!

Originally Posted by AMSOILGUY

So using the Oct 30th cost and the equation given with the Oct 31st close date I get the decimal given. So what does that number mean to me. I'm thinking you multiple that number by the cost of the stock to get a $ amount you earned?

What is the time frame you should use?

Sorry guys this is the first I have really ever paid any attention to this stuff. I will say that I had my son figure out the decimal listed so he is learning also. I wish somebody would have taken the time to try and teach me this at 11.

Also, what is the Div/Yield? Is it Daily/ What time frame?

KO=Div/yield .31/2.95 and cost 41.40
Oct 31st Cost 41.88 =.018863419
DPS=Div/yield .41/2.38 and cost 68.94
Oct 31st Cost 69.25 = .010493864
PEP=Div/yield .65/2.74 and cost 95.65
Oct 31st 96.17=.012232096