If I have a single share, lets say in Google which is currently worth 605.79. Lets say they pay out the dividends quarterly. What does that mean and how much would I get quarterly?
asked Aug 2, 2011 at 14:17
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1 Answer
Google is a poor example since it doesn't pay a dividend (and doesn't expect to), so let's use another example with easy numbers.
Company X has a stock price of $100, and it pays a quarterly dividend (many companies do). Let's assume X pays a dividend of $4. Dividends are always quoted in annual terms, as is dividend yield. When a company says that they pay "quarterly dividends," it means that the company pays dividends every quarter, or every 3 months.
BUT, if a company has a $4 dividend, you will not receive $4 every quarter per share. You will receive $4/4 = $1 per share, every quarter. So over the course of a fiscal year, or 4 quarters, you'll get $1 + $1 + $1 + $1 = $4 per share, which is the annual dividend.
The dividend yield = annual dividend/stock price. So in this case, company X's div. yield will be $4/$100 * 100 = 4%. It's important to note that this is the annual yield. To get the quarterly yield, you must divide by 4. It's also important to note that the yield fluctuates based on stock price, but the dividend payment stays constant unless the company states an announcement.
For a real world example, consider Intel Corp. (TICKER: INTC) http://finance.yahoo.com/q?s=INTC
The share price is currently $22.05, and the dividend is $0.84. This makes the annual yield = $0.84/$22.05 * 100 = 3.80%. Intel pays a quarterly dividend, so you can expect to receive $0.21 every quarter for every share of Intel that you own.
Hope that clears it up!
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4+1 great answer. just one small comment. The yield is almost always quoted on an annualized basis as you state, but I would say the actual monetary amount in my experience is just as often quoted as a quarterly figure. See google finances Intel quote. Mar 14, 2012 at 22:39
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I want to challenge this answer. I was starting to believe it; however, I looked up the stock filter to narrow my selections for stocks I currently want to buy because of dividends and this is what I draw from it. So I looked up a stock with an annual of $4-5 and the stock that came up has a quarterly dividend of $1.2748. If this answer holds true, it would mean I would be paid $0.3187 per quarter. Only problem is, is etrade lying to me? Because $1.27 x 4 = 5.0992, which somehow bypassed the annual filter margin O_o, so that means I would be paid $1.2748 every three months. Apr 28, 2018 at 18:48