Dividend Dictionary

The Dividend Observer DICTIONARY is a compilation of the most common terms associated with investing / trading in the Stock Market. Note that the definition found herein are taken from the published articles available in the internet by different educators.   

tdo Dictionary

52-Week Low

A stock’s 52-week low is the lowest price traded during the prior 52-week period.

52-Week High

A stock’s 52-week high is the highest price traded during the prior 52-week period.

Ask Price

A stock’s ask price is the lowest price at which the sellers are willing to sell one share of stock. It is also called the “offer price”.

Bear Market

A period when the stock market is generally in decline.

Beta

Beta measures how volatile, or risky, a stock is. It is calculated from past price patterns indicating how much a stock price can be expected to move in relation to a change in the market as a whole.

Bid Price

A stock’s bid price is the highest price at which the buyers are willing to pay and able to purchase for one share of stock.

Board Lot

The Board Lot is the minimum number of shares one can purchase or sell a stock at a specific price range.

Bull Market

A period when the stock market in general increases.

Cash

A stock’s cash is the amount of cash that a company has on hand, according to its most recent balance sheet.

Closing Price

The last traded price of the stock at the end of the trading day.

Day Order

A type of transaction order placed with your stockbroker to buy or sell shares of stock that is valid only for one trading day.

Day Range

A stock’s day range is the price range at which the stock traded during a one-day period. It is a measure of a stock’s volatility within one particular trading day.

Debt

A stock’s debt is the amount of debt that a company is carrying, according to its most recent balance sheet.

Debt-to-Equity Ratio

A stock’s debt-to-equity ratio is calculated by dividing debt by equity. It is a measurement of how healthy a company’s balance sheet is. A debt-to-equity ratio greater than 1 may be a red flag, as it indicates that a company’s debt exceeds its equity.

Dividends

A stock’s dividend is the amount of cash distributed per share each year. Dividends are stated in annual dollar amounts but typically are paid quarterly, with each quarter’s dividend payment being equal to one-fourth of the stock’s dividend.

Dividend Growth

A stock’s dividend growth is calculated by dividing difference in dividend payments over two periods, divided by the dividend payment in the first period. It is a measure of how a company is growing its dividend payment to shareholders.

Dividend Yield

A stock’s dividend yield is calculated by dividing dividend per share by price. It is a measure of how much of a company’s market value is being paid in dividends to shareholders each year.

Earnings

A stock’s earnings are equal to its after tax net income from the previous year.

Earnings Growth

A stock’s earnings growth is calculated by dividing the change in earnings by the previous period’s earnings. It is a measure of a company’s growth over a select time period. Frequently used time periods for calculating earnings growth include one-year, five-year, and 10-year. This figure can be used to compare the relative growth of companies or sectors against one another.

Ex-Dividend Date

A stock’s ex-dividend date is the date on which a stock will begin trading without its upcoming dividend. All stockholders of record prior to the ex-dividend date will receive the stock’s upcoming dividend. A purchaser of a stock on or after the ex-dividend date does not receive the stock’s upcoming dividend; it goes to the seller instead.

Equity

A stock’s equity is calculated by subtracting liabilities from assets. It is a measure of shareholder value in a company.

Good-til-cancelled Order

A type of transaction order placed with your stockbroker to buy or sell shares of stock which remains outstanding for several days until cancelled by the investor or trader.

High Price

The highest price of the stock traded for the trading day.

Limit Order

A type of transaction order placed with your stockbroker to buy or sell shares of stock at a specified buying or selling price.

Low Price

The lowest price the stock traded for the trading day.

Market Cap (Market Capitalization)

A stock’s market capitalization is calculated by multiplying price by the number of shares outstanding. It is the definition of the company’s total market value. This figure can be used to compare the relative size of companies or sectors against one another.

Market Order

A type of transaction order placed with your stockbroker to buy or sell shares of stock at the current market price.

Opening Price

The first price of the stock traded for the trading day.

Payout Ratio

A stock’s payout ratio is calculated by dividing dividend per share by earnings per share. It is a measure of how much of a company’s earnings are being paid in dividends to shareholders each year.

Peso Cost Averaging

A strategy / program of investing that set an amount on a regular schedule regardless of the price of the shares at the time.

Portfolio

The collection of all your investments.

Price-to-Book Ratio

A stock’s price-to-book ratio (or, P/B ratio) is calculated by dividing price by book value per share. It is one of several ways to measure a company’s valuation. Book value is derived from a company’s balance sheet, and is calculated by subtracting total liabilities from tangible assets.

Price-to-Earnings Ratio

A stock’s price-to-earnings ratio (or, P/E ratio) is calculated by dividing price by earnings per share. It is the most common measurement of a company’s valuation. An average P/E ratio is typically in the 20 to 25 range, although this varies widely across different sectors. High P/E ratios usually indicate that future earnings growth is expected. Companies with no earnings have no P/E ratio.

Return (total return)

A stock’s return is calculated by dividing the price gain by the previous period’s price. It is a measure of a stock’s performance over a select time period. Frequently used time periods for calculating return include year-to-date (YTD), one-year, five-year, and 10-year. This figure can be used to compare the relative performance of companies or sectors against one another.

Revenue

A stock’s revenue is equal to the amount of money brought in during a particular period. It is also known as gross income, from which expenses are deducted to arrive at net income.

Revenue Growth

A stock’s revenue growth is calculated by dividing the revenue gain by the previous period’s revenue. It is a measure of a stock’s growth over a select time period. Frequently used time periods for calculating revenue growth include one-year, five-year, and 10-year. This figure can be used to compare the relative growth of companies or sectors against one another.

Risk

The possibility that you may lose some (or all) of your original investment. In general, the greater the potential gain from an investment, the greater the risk is that you might lose money.

Shareholder’s Equity

The difference between the company assets and its liabilities. Also called Book Value.

Stock

A share of stock that represent ownership in the company that issues it. The price of the stock goes up and down, depending on how the company performs and how investors think the company will perform in the future.

Ticker

The computerized listing of information showing stock market activity and stock price movements. Information includes the stock symbol, last traded price, and the volume of shares traded.

 

Volatility

The degree to which a security varies in price. In general, the more volatile a stock, the more risk is involved.

Volume

Volume is the number of shares traded in the stock market during a given period of time.

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