To An Investor, A Dividend Is A Valuable Thing!

Analysts use a number of methods to value and assess companies. The dividend policy of a company offers useful insights into the valuation and potential return an investor might receive.

There are a number of ratios based on accounting methods which are used. These can help to estimate the future dividend flow from a stock.

In the UK, for example, they are usually paid every six months. The first is known as an interim dividend, whilst the second is known as the final dividend.
These payments can be the same size or of different amounts. If the interim and final dividend are for different amounts though, it is usually the final which is the larger sum.

Since payments from a holding can be a large or at least significant portion of long term returns, it is useful for an investor to gain a working knowledge of this subject.