How to Calculate Income from Dividends

Calculate income from dividends by looking at your account statement.

There are two primary ways in which investors make money: interest and dividends. Interest is paid on debt, while dividends are paid to shareholders. While a company is not obligated to pay shareholders dividends (unlike paying bond interest), it is not considered a good move when the board of directors cuts or does not issue a dividend. For this reason, most companies issue a dividend every quarter.

Things You'll Need

• Calculator or spreadsheet
• Stock account statement for the past four quarters

Instructions

1. Obtain your stock account statements for the past 12 months. This statement has all income information, including dividend payments that were made. Dividend payments are usually made once every quarter. You can also find out the dividend payment made by looking at past press releases by the company or by contacting the investor relations department.

2. Determine the dividend amount. Total all dividend payments for the past year. Also be mindful of one-time dividend payments. Let's say the company paid out 25 cents every quarter and then paid a one-time dividend of $2 in the middle of the year due to strong earnings growth.

3. Calculate the dividend income per share. Total all dividend amounts. The calculation is ($.25 x 4) + $2 = $3.

4. Calculate total income from dividends. Multiply the number of shares owned by the dividend income per share. Let's say you own 100 shares of XYZ stock. The calculation is 100 x $3 = $300.

References

• Investopedia: Dividend Per Share
• Investopedia: Dividend