Dividend ratios

Dividend ratios

1.         Dividend per shares (DPS)     =          Earnings to ordinary shareholders

                                                                        Number of ordinary shares

            Indicate cash returns received for every share held.

2.         Dividend yield (DY)  =          DPS

                                                            MPS

           

Indicate dividend returns for every shilling invested in the firm.

3.         Dividend cover                       =          DPS

                                                                        DPS

Indicate the number of times dividends can be paid out of earnings of shareholders.  The higher the DPS the lower the dividend cover.

4.         Dividend Payout Ratio           =          DPS

                                                                        EPS

Shows the proportion of Earnings which was paid out as dividends and how much was retained.