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I'm brand new to purchasing stocks and I have a question.

If I purchase, say, one share of Exxon at $78.19, do I divide 78.19 by 4.09 (Dividend Yield/Amount) = 19.117 ? Would this mean I would get paid 19.117 on every Dividend Payable Date. This of course depends on the price of the stock of course because it's constantly fluctuating.

Also, which Price Type would allow for this to happen?
Below is an image to everything I've referred to.

Image of what I'm referring to

  • $78.19 x 0.0409 = $3.20 annual dividend. – Victor Mar 6 at 21:29
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Dividend Yield is a historical measure, meaning what dividend did they pay out as a percentage of the stock price at the time? Companies can pay dividends however they want - as a percentage of their net income, a fixed amount, or none at all.

On 2/8 they declared a dividend of $0.82 per share, which, when multiplied by 4 since they pay dividends quarterly, is 4.09% of 80.19, the closing price on March 5 (the day before you took the image). The current price on the image is 78.19, and their real-time dividend yield dropped 4.2%. The point is that the company sets an amount for a dividend, and the yield fluctuates as stock price fluctuates.

I would look at their dividend history and see if the dividend amount was stable or how it varies relative to their stock price. That will give you an indication of (roughly) the amount that you'll get on the next dividend date.

Secondly, understand that when a company pays a dividend, it's "cash out the door" and the stock price drops by roughly the same amount, so it's a net wash from a total return standpoint (You get $1 in cash but the stock is worth $1 less than it was before the dividend).

Also, which Price Type would allow for this to happen?

Those have nothing to do with how much dividend you get. Those types determine the price you're willing to buy (or sell) the stock for. The yield is based on the market price at the time the dividend was paid, not how much you paid for the stock.

  • ah ok, I catch your drift. But I have another question. Which would be the most efficient Price Type should I choose to start out? I'm going to go with Market because it seems like the most basic one based on its description. – newsky Mar 6 at 15:20
  • There are several questions on this site explaining those, but basically market price guarantees that you buy the stock - limit price sets the maximum price you want to pay (but no guarantees). Stop orders execute a market or limit order if some price level is breached. – D Stanley Mar 6 at 15:44
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If I purchase, say, one share of Exxon at $78.19, do I divide 78.19 by 4.09 (Dividend Yield/Amount) = 19.117 ?

The image shows Dividend Yield/Amount as being 4.09%/.82. Here, the slash mark isn't division, it's just a separator. It's combining two numbers into one line, with the left side of the slash in the label ("Yield") corresponding to the left number ("4.09%") and the right side ("Amount") corresponding to the right number (.82). This is saying that the dividend as percentage of the stock price is 4.09%, and as a dollar amount is $0.82. Percentages are calculated as part divided by whole. In this case, that means yield = dividend/share price. So you divide to get the yield from the dividend, but to get the dividend from the yield, you multiply. If you take 4.09% * $78.19, you get $3.1979, which is of course not equal to $0.82, but if you take $0.82 as a quarterly dividend and multiply it by four to get the annualized dividend, you get $3.28, which is equal to 4.09% of $80.19, which according to D Stanley was the closing price on March 5 (I don't see that number anywhere, so presumably D Stanley calculated it by taking the current price and working backwards using the price drop given).

If you divide $78.19 by 4.09%, you get $1911.74, not $19.11. Remember that 4.09% is equal to 0.0409. But you don't need to do any math to get the dividend amount, because it's explicitly given as $0.82.

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