Investor Analysis Flashcards
What are dividends?
Distribution of profits to the owners, paid as dividend per share (DPS)
How to calculate dividend per share?
Total dividends/Number of shares in issue
What is dividend cover?
Allows users to see how safe their dividends are
What is dividend yield?
Allows users to see return they get for every $1 invested
How to calculate dividend cover?
PFY/Dividends
How to calculate dividend yield?
(Dividends/Share price) * 100%
What is the constant pay-out ratio?
Each year, I pay a % of profits out to shareholders then retain the rest (fluctuating dividend)
What is an annual growth in dividends?
Dividend has a set growth rate every year
What is the price earning ratio?
Allows investors to see how confident the market is in company’s future performance
What is price per share?
market’s anticipation of value to be added from future sales and earnings
What is earnings per share?
Value added from current sales and earnings
How to calculate PE ratio?
Price per share / Earnings per share
What does a high PE ratio?
More future earnings
What does a low PE ratio?
Lower future earnings
