Publicly traded companies are required to release a variety of financial information each year so that investors can research the company's financial stability and potential for growth. One of the forms is called the statement of stockholders' equity and it shows how the value of the company has changed for the shareholders during the year. This statement contains the total amounts of dividends paid, but not the total number of shares outstanding. Calculating the dividends paid per share can help shape your decision about whether a company is a good investment for you.
1. Look up the company's common share dividends paid and preferred share dividends paid on the company's statement of stockholder equity. You can find these amounts under the column headed "Retained Earnings."
2. Look up the company's total common shares outstanding and total preferred shares outstanding in the company's annual report.
3. Divide the company's preferred share dividends by the preferred shares outstanding to find the preferred dividends per share. For example, if the company paid $400,000 in preferred share dividends and had 80,000 preferred shares outstanding, the company paid $5 per preferred share in annual dividends.
4. Divide the company's common share dividends by the common shares outstanding to find the common dividends per share. For example, if the company paid $500,000 in preferred share dividends and had 200,000 preferred shares outstanding, the company paid $2.50 per common share in annual dividends.
Items you will need
- Annual report
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