#ThursdayThreads
Let's talk about Dividends.
Investors in the stock market earn returns in two main ways; Capital gains when the stock price goes up or through Dividend payments that are usually made annually based on company performance.
The amount of dividend to be paid out...
Let's talk about Dividends.
Investors in the stock market earn returns in two main ways; Capital gains when the stock price goes up or through Dividend payments that are usually made annually based on company performance.
The amount of dividend to be paid out...
...is usually defined by a listed company's dividend payment policy.
Public companies normally declare dividends when announcing their full year results.
However, in some instances where the financial performance for a given period (quarterly/or half year results) have exceeded
Public companies normally declare dividends when announcing their full year results.
However, in some instances where the financial performance for a given period (quarterly/or half year results) have exceeded
expectations, interim/special dividends can be declared and paid out.
Steady dividend payouts from a company create a sense of stability for investors due to regular and predictable income.
Steady dividend payouts from a company create a sense of stability for investors due to regular and predictable income.
Dividend Yield/Dividend Pay-Out Ratio is the percentage return an investor expects to earn from an investment in a specific stock.
Stocks that have a good dividend pay out ratio are commonly referred to as Dividend Stocks/Shares.
Stocks that have a good dividend pay out ratio are commonly referred to as Dividend Stocks/Shares.
To calculate the Dividend yield of a stock, take the [Cash Dividend per share / Market Price per share] * 100
Some investors use this ratio to determine which stock to invest in.
If you take Safaricom for instance, it was one of the few firms that paid dividends last year.
Some investors use this ratio to determine which stock to invest in.
If you take Safaricom for instance, it was one of the few firms that paid dividends last year.
The dividend was Kes.1.37 per share.
Their Dividend Yield at the current price (Kes.38) assuming all other factors constant would therefore be (1.37/38)*100 which is about 3.6%.
Their Dividend Yield at the current price (Kes.38) assuming all other factors constant would therefore be (1.37/38)*100 which is about 3.6%.
You can do this for your favourite company and know if you are invested in a Dividend stock or a Growth stock.
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