Dividend
A dividend is a distribution of part of a company's profits or reserves to its shareholders, most often paid in cash and declared per share. Dividends are decided by the board and are not guaranteed.
Investment & trading encyclopedia
Understand investment products, market mechanics, indicators and research terminology. Each entry includes an explanation, example, cautions and related learning.
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Dividend Yield
Dividend yield expresses a stock's annual dividend as a percentage of its current share price. It shows the cash income a share pays relative to its price, not the total return.
Earnings Per Share (EPS)
Earnings per share is the portion of a company's net profit that belongs to each ordinary share. It converts total profit into a per-share figure so that results can be compared with the share price and across periods.
Equity
Equity is the residual ownership value of a business or asset after liabilities are subtracted. In markets, the word is also used for the asset class of company shares, as in equity markets or equity funds.
Free Float
Free float is the portion of a company's shares that is available for ordinary investors to trade, after excluding stakes held by controlling shareholders, governments, insiders and other strategic holders. It is usually expressed as a percentage of shares outstanding.
Market Capitalization
Market capitalization is the total market value of a company's issued shares, found by multiplying the share price by the number of shares outstanding. It measures the size of a company's equity as priced by the market, not its assets or revenue.
Price-to-Book Ratio (P/B)
The price-to-book ratio compares a stock's market price with the accounting value of shareholders' equity per share. It indicates how much the market pays for each unit of net assets recorded on the balance sheet.
Price-to-Earnings Ratio (P/E)
The price-to-earnings ratio compares a stock's share price with the company's earnings per share. It shows how many units of currency the market currently pays for one unit of annual earnings.
Return on Equity (ROE)
Return on equity measures how much net profit a company generates for each unit of shareholders' equity, expressed as a percentage. It indicates how efficiently the company uses the capital belonging to its shareholders.
Stock
A stock is a unit of ownership in a company, usually called a share, that gives its holder a residual claim on the company's profits and assets, ranking behind creditors. Listed stocks can be bought and sold on an exchange at a market-determined price.