How to Calculate the Amounts of Dividends for Each Stock

Stocks can provide income in two main ways: share price appreciation and dividends. Both are considered as earnings by the IRS. Dividends are declared by the company board of directors on every share issued. There are three things you need to calculate dividends per share: the sum of the dividends over one year, special dividends and the number of shares outstanding for the time period (1 year).

Things You'll Need

• Calculator or spreadsheet

Instructions

1. Review the DPS (dividends per share) calculation. DPS equals the total dividends paid out over a year (minus special or one-time dividends) divided by the total number of outstanding ordinary shares issued.

2. Walk through an example. XYZ Company decided to pay out $100,000 in dividends last year. Included in this is a special dividend of $20,000. The company has a total of 2 million shares outstanding. Compute the dividends for each stock or DPS.

3. Subtract out the special dividend amount from the regular dividend. The equation is: $100,000 - $20,000 = $80,000.

4. Divide the regular dividend amount by the total number of shares outstanding. This equals: $80,000 / 2,000,000 = $.04 per share.

References

• Investopedia: Dividend Per Share