Dividend Stocks For Dummies
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Major business publications like Investor’s Business Daily and The Wall Street Journal publish stock tables to help current and potential investors see a snapshot of a company’s stock. Yet this snapshot can be hard to understand if you don’t know the pieces recorded in the stock table.

52-Wk High 52-Wk Low Name (Symbol) Div Vol Yld P/E Day Last Net Chg
21.50 8.00 SkyHighCorp (SHC) 3,143 76 21.25 +.25
47.00 31.75 LowDownInc (LDI) 2.35 2,735 5.9 18 41.00 –.50
25.00 21.00 ValueNowInc (VNI) 1.00 1,894 4.5 12 22.00 +.10
83.00 33.00 DoinBadlyCorp (DBC) 7,601 33.50 –.75
Name and symbol

The “Name (Symbol)” column is the simplest in the table. It tells you the company name (usually abbreviated) and the stock symbol assigned to the company.

When you have your eye on a stock for potential purchase, get familiar with its symbol. Stock symbols are the language of stock investing, and you need to use them in all stock communications, from getting a stock quote at your broker’s office to buying stock over the Internet.

Dividend

Dividends (shown under the “Div” column) are basically payments to owners (stockholders). If a company pays a dividend, it’s shown in the dividend column. The amount you see is the annual dividend quoted for one share of that stock. If you look at LowDownInc (LDI), you can see that you get $2.35 as an annual dividend for each share of stock that you own.

Companies usually pay the dividend in quarterly amounts. If you own 100 shares of LDI, the company pays you a quarterly dividend of $58.75 ($235 total per year). A healthy company strives to maintain or upgrade the dividend for stockholders from year to year.

Yield

In general, yield is a return on the money you invest. However, in the stock tables, yield (“Yld”) is a reference to what percentage that particular dividend is of the stock price. Yield is most important to income investors. It’s calculated by dividing the annual dividend by the current stock price.

You can see that the yield du jour of ValueNowInc (VNI) is 4.5 percent (a dividend of $1 divided by the company’s stock price of $22). Notice that many companies report no yield; because they have no dividends, their yield is zero.

Keep in mind that the yield reported in the financial pages changes daily as the stock price changes. Yield is always reported as if you’re buying the stock that day. If you buy VNI on the day represented, your yield is 4.5 percent. But investors who buy stock at $30 per share obtain a yield of just 3.3 percent (the dividend of $1 divided by the new stock price, $30).

About This Article

This article is from the book:

About the book author:

Lawrence Carrel is a financial journalist and served as a staff writer at TheWallStreetJournal.com and TheStreet.com. He is the author of ETFs for the Long Run: What They Are, How They Work, and Simple Strategies for Successful Long-Term Investing (Wiley).

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