What are dividends?Dividends are payments made by corporations to their shareholder members. Dividend is the portion of corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend.
Many corporations retain a portion of their earnings and pay the remainder as a dividend.
Dividends are usually settled on a cash basis, as a payment from the company to the shareholder. They can take other forms, such as store credits (common among retail consumers’ cooperatives) and shares in the company (either newly-created shares or existing shares bought in the market).
What is dividend yield?The dividend yield on a company stock is the company’s annual dividend payments divided by its market cap, or the dividend per share divided by the price per share. It is often expressed as a percentage. Unlike preferred stock, there is no stipulated dividend for common stock. Instead, dividends paid to holders of common stock are set by management, usually in relation to the company’s earnings.
There is no guarantee that future dividends will match past dividends or even be paid at all. Due to the difficulty in accurately forecasting future dividends, the most commonly-cited figure for dividend yield is the current yield which is calculated using the following formula:
Current Dividend Yield = Most recent Full-Year Dividend / Current Share Price
What is P/E?The P/E (Price/Earnings) ratio is a statistic calculated by dividing the price of a stock by the reported actual earnings per share of the issuing company. It is also called the multiple.
What is an Exchange Traded Fund (ETF)?An exchange-traded fund (ETF), also known as an exchange-traded product (ETP), is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks or bonds and trades at approximately the same price as the net asset value of its underlying assets over the course of the trading day. Most ETFs track an index, such as the S&P 500 or MSCI EAFE.
ETFs may be attractive as investments because of their low costs, tax efficiency and stock-like features.
Go directly to the highest dividend yielding ETFs
What is an ISIN?An International Securities Identification Number (ISIN) uniquely identifies a security. Its structure is defined in ISO 6166. Securities for which ISINs are issued include bonds, commercial paper, equities and warrants. The ISIN code is a 12-character alpha-numerical code that does not contain information characterizing financial instruments but serves for uniform identification of a security at trading and settlement.
Securities with which ISINs can be used include debt securities, shares, options, derivatives and futures. The ISIN identifies the security, not the exchange (if any) on which it trades; it is not a ticker symbol.
An ISIN consists of three parts: Generally, a two letter country code, a nine character alpha-numeric national security identifier, and a single check digit. The country code is the ISO 3166-1 alpha-2 code for the country of issue, which is not necessarily the country in which the issuing company is domiciled. International securities cleared through Clearstream or Euroclear, which are Europe-wide, use "XS" as the country code. In some cases, there will be three letter for the country code: example: SINA: KYG814771047 quoted in the US but domiciliated in Great Cayman. The check digit disappears in that case.
The nine-digit security identifier is the National Securities Identifying Number, or NSIN, assigned by governing bodies in each country, known as the national numbering agency (NNA). The procedure for calculating ISIN check digits is similar to the "Modulus 10 Double Add Double" technique used in CUSIPs. To calculate the check digit, first convert any letters to numbers by adding their ordinal position in the alphabet to 9, such that A = 10 and M = 22. Starting with the right most digit, every other digit is multiplied by two. (For CUSIP check digits, these two steps are reversed.)
The resulting string of digits (numbers greater than 9 becoming two separate digits) are added up. Subtract this sum from the smallest number ending with zero that is greater than or equal to it: this gives the check digit which is also known as the ten's complement of the sum modulo 10. That is, the resulting sum, including the check-digit, is a multiple of 10.
Validate Stock Identifying Numbers (CUSIP, ISIN and SEDOL)
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