How are dividends calculated?

Dividends are expressed as a fixed amount per share. The total you receive depends on how many shares you own. For example: if a company pays $1 per share and you own 100 shares, you'll receive $100. 

To evaluate the return, investors use dividend yield, which compares the annual dividend to the stock's price: 

Dividend Yield = Annual dividend per share ÷ Stock price 

If a company pays $2 per year and the stock trades at $50, the yield is 4%.