There are three methods of calculating the dividends paid to shareholders. Series Ya represents actual investor income, while Series Da measures total earnings multiplied by the average share price. Series R measures earnings-price ratios, and is based on annual indexes of the company’s stock. Both are very useful in evaluating the stability and volatility of income levels. In the following paragraphs we discuss each method and discuss its benefits and limitations.
The Series C index eliminates the seasonal variation in dividend payments. The ex-dividend dates tend to cluster during December, March, June, and September. Then, the value investor can compare the annual payments to the company’s historical distribution of dividends. Once the company has determined which method is the most advantageous, the value investor can proceed to comparing the final and interim payments. If the two methods don’t match up, the value investor can move to a different sector.
Wisesheets includes a free template for dividend analysis. It includes data such as the dividend yield, expected dividend payments, and growth of dividends in the last five years. The spreadsheet can be customized to fit any company. This saves countless hours of work. Wisesheets also offers other stock analysis templates. You can download the free trial to see if Wisesheets is the right tool for you. This way, you can get a feel for the software’s capabilities without the high-cost of custom analysis.
In the past, determining when a company pays a cash dividend can be difficult. This method has been used by many traders and investors to determine when a stock is likely to pay a dividend. However, cash dividends prior to 1896 may be difficult to correct. A study of the average lag between the ex-dividend date and the dividend payment revealed that there is an average lag of about 14 days between the ex-dividend date and actual payout date.