| From everything I've learned so far, this Stock Table has proven to be the most difficult for me. However, if I don't stop and take the time to learn this...I will be missing out on vital information that I'll need later.
Okay Moms. Let's get through this - one heading at a time.
I've listed an imaginary company, HumptyDumpty, and its ticker symbol, EGGY, and values for easy reference, with an explanation of each column. If you check any newspaper, more than likely the tables will be listed in this format. This is only a partial listing of our stock table. The second part will be included in next week's article.
So, we can check any newspaper for stock quotes. Or, if you really want to turn some heads and impress your kids, pick up the Wall Street Journal, find your stock and quietly shake your head from side to side saying, "Hhmm. My stock isn't doing too well today."
| 52 Week High/Low |
Stock |
Ticker Symbol |
Div |
Yield |
P/E |
Vol |
Last |
| 27 / 49 |
HumptyDumpty |
EGGY |
.32 |
0.67% |
|
|
48 |
Let's start with "52 week High/Low." Thankfully this one is easy to find and understand. During the previous 12 months, HumptyDumpty stock had a low price, per share, of $27 and a high price during that same period of $49.
The second column under "Stock" will list the name of the company. The "Ticker Symbol" is how the company is listed on the exchange. So far, so good.
"Div" is short for "dividend" amount. InvestorWords defines dividend as "a taxable payment declared by a company's board of directors and given to its shareholders out of the company's current or retained earnings." Translation: this is the money the company pays us for investing our dollars in their company. These payments can be paid to shareholders every 3 months or in one lump sum at the end of the year. The dividend amount is also called our "annual yield per share."
In the case of our company, EGGY, the company pays us .32 cents per share per year. If these payments are made quarterly, or every 3 months, EGGY would send us .08 cents per share every 3 months. If we owned 1,000 shares in EGGY stock, our annual dividend from this stock would be $320.
We multiply the "dividend " (.32) by the number of shares that we own (1,000), whereby, .32 X 1,000 = $320 which is owed to us for the entire year. And if we asked for this money on a quarterly basis, we would receive $80 every 3 months, throughout the year.
Okay, so far so good. Later we'll find out if that's a good or bad dividend or annual yield per share, but let's keep forging ahead right now. We're just doing calculations and definitions right now.
Calculations? Yikes! However, I do have a great Web site for us that provides every type of way to calculate our investment dollar. Found at ifigure.com, it is just what it says and contains all types of investment calculators.
The next column on our chart is the "Yield." This is short for the dividend yield. Dividend yield is simply the annual dividend yield per share (.32) divided by the stock price, which is listed under the "last price" column (48).
A simple formula is .32 divided by 48 (the last stock price). According to my calculations and my online calculator, our yield is .32 divided by 48, which equals .6666666666666666... or .67%, which again, is our "dividend yield."
I really got confused with "dividend yield per share" and just plain "dividend yield." This feels like that silly bear/bull stuff from last week.
For a quick review: "dividend yield per share" is what the company pays us on a yearly basis. And, "dividend yield" is a ratio that takes into account how much we give the company for buying one share AND how much the company gives us in return. They are two different concepts that appear the same at first glance.
When I ask myself, "Why am I needing this dividend yield?" The Motley Fool to the rescue - with the answer to my question: "Well, so you'll know what percentage growth you'd get from the stock if it did not rise or fall all year" as taken from their book, You have More Than You Think.
Unfortunately, this is not going to be a quick rescue from The Fool. Not their fault though. That explanation went right over my head.
And for some inexplicable reason, I am developing a severe headache. I'll repeat their answer next week and I'll try to decipher what they are trying to tell me...but as of this moment, my brain is fried.
After reading and rereading the above, most of it has sunk in. This is jargon and we have to learn it. I refuse to just let this slide. This is the toughest part, but it is important that I understand this stuff. I hope I've been able to explain this first part with some clarity. I found it helpful to just spend some time with it, checking and rechecking.
Next week we'll keep plugging away at this table.
Now, where did I put that aspirin ... ... ...
Thank you for joining me,
Joyce |
