Dividends refer are transfers of money from a company to its shareholders, based on the number of shares each person owns. If you are looking for a steady stream of income, dividend-paying stocks may interest you because you can receive payments for owning the stock, without having to sell the stock. You can calculate the dividends paid per year by a company in various ways depending on the information you have available.
1. Add each of the dividends paid per share to find the total dividends per share for the year. For example, if a company pays quarterly dividends of $2.40, $2.60, $2.65 and $2.45, add those four figures together to find the dividends per share per year equals $10.10.
2. Multiply the company's annual earnings per share by the dividend payout percentage to calculate the dividends paid per share. For example, if the company has $20.20 in earnings per share, and a dividend payout ratio of 50 percent, multiply $20.20 by 0.50 to find the company paid $10.10 in annual dividends per share.
3. Divide the total annual dividends paid by the number of common shares outstanding. For example, if the company pays $3,232,000 in dividends and has 320,000 shares outstanding, divide $3,232,000 by 320,000 to find the company paid $10.10 in dividends per share.
4. Multiply the stock's current price by the annual dividend yield to find the annual dividends. For example, if a stock has a price of $126.25, and a dividend yield of 8 percent, multiply $126.25 by 0.08 to find the annual dividends equal $10.10.
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