The dividend per share is the payment distributed by the company’s board of directors among the shareholders and stockholders of the company. In case of the preferred shares, the dividend is a fixed amount and for the common shares, the dividend may vary with the performance of the company.
The dividends per share offered by the companies largely vary with the fortunes of the company. Generally in case of the common shares, the dividend per share depends on the cash on hand and may also be discarded if the board of directors of the company decides to withhold the earnings to reinvest in the company.
It also may happen, that some company, which is not earning profit currently is paying dividend out of its past earnings. The dividend per share of company may also be referred to as the amount paid to the shareholders from the after-tax earnings of a company.
The earnings of a company may also be distributed among the shareholders in the form of money, scrip, stock or even in the form of company products or property.The amount to be paid as dividend is decided by the board of directors of the company.
Dividends are generally paid on a quarterly basis. The companies declare their dividends as the income earned in the year.
The profits earned by the companies are either reinvested in the company or is prorated among the shareholders. The paying out of dividends per share is not the expense of the company but is the division of the company asset amongst the shareholders. The dividends are declared by the board of directors of the company. The dividends earned per share are important for the long-term investors and that’s what the researches suggest. Some of the biggest companies of the world have been paying an annual dividend or quarterly dividend for years. The investors may pick the undervalued stocks and need to look closely at dividend offered by the company.