Dividends are payments the company makes to shareholders based on the number of shares the investor owns. This allows investors to use the money as income or to reinvest it in other companies that are expanding. When companies announce dividends, they may announce how much they pay per share, or they may simply announce the total dividend payment, from which you can calculate the dividends per share.
1. Look up the company's total dividends paid, and the total number of outstanding shares. This information can be found in a company's annual report, or 10-K SEC filing.
2. Divide the total dividend paid by the number of shares outstanding to find the dividends per share. For example, if the company pays $4 million in dividends and has 20 million shares outstanding, divide $4 million by 20 million to get a dividend of $0.20 per share.
3. Multiply the dividends per share by the number of shares you own to calculate the amount you receive. For example, if you own 1,200 shares, multiply 1,200 by $0.20 to get $240 in dividends.
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