When looking up a dividend paying stock, four main pieces of information about the dividend are usually available:
- Dividend
- Ex-Dividend Date
- Dividend Yield
- Forward Dividend Yield
If the stock is purchased on or after the Ex-Dividend date, the buyer of that share will not receive the next dividend. When a stock suspends its dividend, the last Ex-Div date before the last payment made may still be displayed.
Dividend yield can be calculated a number of different ways and may be termed differently on different websites. What is termed yield on one site may be termed forward yield on another.
Dividend Yield (Div Yield on Stockhouse) is expressed as a percentage. It is the dollar amount of the dividend annualized as a percentage of share price. For example, if a stock pays a monthly dividend of $0.10 that is $1.20 annually. If the current share price is $5.00, the dividend yield is 24%.
Forward Dividend Yield (Fwd Div Yield on Stockhouse) is expressed as a percentage. It is the dollar amount of the dividend annualized as a percentage of share price. It could be based on either the next twelve months or the number of months remaining in the calendar year. For example, a stock pays a dividend of $0.10 per month, there are eight remaining payments in the year and the share price is $5. $0.80 divided by a share price of $5 is a forward yield of 15.81%. Based on a full year from now, the forward yield is $1.20 divided by a share price of $5 resulting in a forward yield of 24%.
A trailing dividend yield can also be calculated which is the past year's dividends as a percentage of current share price. For example, if the dividend is $0.10 and was paid seven out of the last twelve months, the trailing dividend is $0.70 divided by a share price of $5 resulting in a trailing dividend of 13.83%
I have noticed that on Stockhouse, sometimes Div Yield is what is defined above as Dividend Yield and sometimes it is a forward yield, based on how many months remain in the calendar year, so it will be equal or less than the Fwd Div Yield which is what most websites define simply as yield, or the annualized dividend divided by the current share price.
I have also noticed that on Stockhouse if a stock is not currently paying a dividend, then Fwd Div Yield may be either be the Forward Yield as defined above based on number of months left in the calendar year, or displayed as "--".
In most split share corporations, the dividend amount is fixed for both the Preferred shares and the Class A shares. This means that even though a particular Class A share may be yielding 20% or 24%, the company is not paying out any more or less in dollar terms than they were when the shares were yielding 14% or 16% or 8%. The yield changes as the share price changes, but the dollar amounts of the dividends and distributions remains the same.
For example, Dividend 15 Split Corp Preferred Shares pay a monthly dividend of $0.04375 which is a yield on the original share price of $10 of 5.25%. Since the Preferred shares tend to trade at prices slightly higher than the original issue price, the yield an investor will receive will be slightly lower than 5.25%.
The Class A shares pay a monthly distribution of $0.10. The yield will vary depending on the share price, but in all cases, the company is paying out the same dollar amount, $0.10 per share. The Class A shares can vary widely in value, so the yields will vary widely as well.
| Distribution | $0.10 |
| Share Price | Yield |
| $5.00 | 24.00% |
| $6.00 | 20.00% |
| $7.00 | 17.14% |
| $8.00 | 15.00% |
| $9.00 | 13.33% |
| $10.00 | 12.00% |
| $15.00 | 8.00% |
It is often the case that when yields rise to values of 14% and higher, the distribution may or may not be made. That is dependent on the Net Asset Value of the fund, or the NAV. Most split share corporations set a minimum NAV of $15 before a distribution is made.
In cases where a distribution is missed for one or more months, the yield will change each month. A purchaser of a Class A share may buy the share when it is yielding 20%, but may find that it does not pay every month, dropping their yield.
The following table shows the actual yield based on how many distributions were received and original share price:
| Share Price | ||||||
| Annual Dist | $1.20 | $5.00 | $7.50 | $10.00 | $12.50 | $15.00 |
| # | Total Rec'd | Yield | ||||
| 1 | $0.10 | 2.00% | 0.27% | 0.20% | 0.16% | 0.02% |
| 2 | $0.20 | 4.00% | 0.53% | 0.40% | 0.32% | 0.04% |
| 3 | $0.30 | 6.00% | 0.80% | 0.60% | 0.48% | 0.05% |
| 4 | $0.40 | 8.00% | 1.07% | 0.80% | 0.64% | 0.07% |
| 5 | $0.50 | 10.00% | 1.33% | 1.00% | 0.80% | 0.09% |
| 6 | $0.60 | 12.00% | 1.60% | 1.20% | 0.96% | 0.11% |
| 7 | $0.70 | 14.00% | 1.87% | 1.40% | 1.12% | 0.12% |
| 8 | $0.80 | 16.00% | 2.13% | 1.60% | 1.28% | 0.14% |
| 9 | $0.90 | 18.00% | 2.40% | 1.80% | 1.44% | 0.16% |
| 10 | $1.00 | 20.00% | 2.67% | 2.00% | 1.60% | 0.18% |
| 11 | $1.10 | 22.00% | 2.93% | 2.20% | 1.76% | 0.20% |
| 12 | $1.20 | 24.00% | 3.20% | 2.40% | 1.92% | 0.21% |
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