These credits can also be used to offset the tax liability on other investments. The key indicator for income investors is the dividend yield, which is shown in the Herald 's daily sharemarket tables. The dividend yield shows dividends as a return on your investment based on the current share price. You can calculate this by dividing the most recent annual dividend per share by the latest share price, and expressing the result as a percentage. While income investors want to buy stocks with a high dividend yield, long-term investors also want to know that the company has enough retained earnings to grow and hence to continue to produce a healthy income stream.
Dividend cover shows how much after-tax profit is being used to finance dividends.
This is calculated by dividing dividend per share by earnings per share. The result is expressed as the number of times dividend is covered by earnings. This material is subject to copyright and any unauthorised use, copying or mirroring is prohibited.