Some companies offer shareholders a piece of company profits or reserves in the form of a dividend. Policies vary from company to company, but it is usually an amount determined by the Board of Directors. The money may come as a lump-sum payment, or it may be divided into quarterly or semi-annual payments. The amount that a shareholder receives is based on the dividend-per-share amount as well as the number of shares of company stock owned.
1. Look up the company's dividend-per-share amount. Usually, the company lists this in its end-of-year financial statement. If you didn't automatically receive a copy of this in the mail, you can usually locate it somewhere on the company's website.
2. Multiply the dividend-per-share amount by the number of shares that you hold. For example, if the dividend-per-share amount is $0.50 and you hold 1,000 shares, you will receive $500 for the year.
3. Divide by the number of payments you expect throughout the year. In the above example, if the company is making semi-annual payments, you'll receive 2 checks for $250; if it's making quarterly payments, you'll receive 4 separate checks for $125, spaced evenly throughout the year.
- Not all companies pay dividends. If you cannot find a dividend-per-share amount, you may have a stock that does not offer dividends.
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