For instance, a S$10,000 investment in a stock with a 5% dividend yield will give you S$500 in annual dividend income without you having to do anything.
Investors eyeing a specific company’s stock can delve into its dividend history on financial and investment websites, as well as stock market indexes such as Nasdaq, S&P 500, Straits Times Index and more.The dividend payout ratio is the percentage of a company’s earnings paid out as dividends. To calculate it, simply divide the dividend per share by the earnings per share.
That said, payout ratios vary by sector. Therefore, there is no hard and fast rule for what’s considered a “good” payout ratio.The dividend growth rate measures how a company’s dividend payouts grow over time. Stocks with sustained and robust dividend growth can help you hedge against inflation, as the increase in dividends every year helps to preserve your purchasing power.
The current dividend yield is calculated by dividing a company’s annual dividend by its share price on a specific date. For example, if the stock price is S$100 and the annual dividend is S$5, the dividend yield would be 5%.