There are two main ways for investors to earn income on investments: dividends and interest. Interest is earned on fixed income products like bonds and CDs (Certificates of Deposit). Dividends are earned on stocks and are usually paid out to shareholders on a quarterly basis. There are also one-time dividends that are paid out when the company has a particularly successful earnings season. The sum of quarterly dividends and one time dividends equals total dividend income.
Things You'll Need
- Calculator or spreadsheet
Obtain your most recent brokerage statement and company press releases for the past 12 months. You can obtain the company press releases online via the company website or by contacting customer relations.
Determine dividends paid for the past year.Let's say that both your brokerage statement as well as press releases from the past 12 months confirm that the quarterly dividend for the past 4 quarters is $.25 and there was a one time dividend of $2 in the middle of the year.
Sum the quarterly dividend and the one time dividend for total dividend Income per share. The calculation is: ($.25 x 4) + $2.00 = $3.00.
Calculate the annual dividend income. Multiply the total dividend income per share by the number of shares you own of the stock. Let's say you own 100 shares of company XYZ stock. The annual dividend income is: 100 x $3.00 = $300.00.
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