Dividend Per Share, Dividend Yield and Dividend Cover

Dividend Per Share

The dividend per share is the total dividend amount to be paid out by the company divided by the number of ordinary shares in issue. The total amount to be paid will either be the sum of the interim and final dividend or, if the company pays quarterly dividends, the sum of each quarter's dividend amount.

Dividend Yield

The dividend yield for a company is the dividend per share divided by the share price. For example, if the dividend per share was 4p and the share price 100p the yield would be (4p / 100p) * 100 = 4%. This means on a £1000 investment you would receive a dividend worth 1000 * 0.04 = £40 (but remember you would lose at least 10% of this as tax).

On the main page, we quote two different dividend yield figures for a company: the historical and projected yield, both of which are based on a year's worth of dividend payments. The historical figures are what has last been announced and the projected figures are what is anticipated will be announced.

Dividend Cover

The dividend cover tells you how many times the dividend could be paid out of current profits after tax. In this way, it illustrates the affordability of the current dividend and can be used to gauge whether the current level of payout can be sustained. Dividend cover is calculated as the earnings per share divided by dividend per share. It needs to be considered within the context of the company. For example, with a growth company you should see the dividend being covered several times but with a non-growth company it being close to one may be acceptable.