Presentation and hidden dividends

[plan-b]

Good morning,

I just registered on this site and have already learned a lot in the space of a few days. I found the ebook very well done too, a wealth of information presented in a clear and concise manner. Well done, if all financial books were like this we would progress much faster!

As for me, I recently opened brokerage accounts, including one at tradedirect.ch. I have a few hundred francs to invest, but for the moment my wallet is... empty.

In short, I am a beginner and am in the phase where I am trying to make sense of the concepts and indicators that are presented on this site and elsewhere.

On this subject, I wanted to understand how dividend yield was calculated and I tried to reproduce by myself the value displayed on the Yahoo Finance site (in this case for McDonald's (MCD)). The site displays the dividend per share and the dividend yield (in %).
I could understand the first one but not the second one which seemed wrong to me according to my calculations.

Puzzled, I still do a Google search - just in case - and actually come across this article:
http://www.joshuakennon.com/yahoo-finance-calculating-dividend-yield-incorrectly-stocks/
which explains that Yahoo incorrectly calculates the dividend yield for certain values (!).

In short, this is not the most important information. What piqued my curiosity is one of the comments at the bottom of this page which explains that financial portals only display regular dividends while many companies offer "special" dividends in addition to regular dividends (NPK is cited as an example) and that these are rarely if ever reported. Which still changes the situation considerably, I think (in the case of NPK the dividend yield displayed is around 1% while taking into account special dividends we would be more like 7%)

Were you aware of the existence of these additional dividends? And if so, how can one obtain this kind of information?

Subsidiary question: Does this site take into account these little-known dividends offered by certain stocks when subjectively evaluating them?

Thanks for reading, it's a bit long for a first post I realize.

[Jerome]

Hello plan-b

Thank you for your compliments first of all.
As for the famous Yield, you have to be careful because everyone has their own methodology. Overall, the value indicated on most serious sites is correct, but you have to know what you are talking about:
– first we need to see how dividends that are paid several times a year are counted. Some multiply the last dividend paid by the annual frequency, others take the sum of dividends paid during the last 12 months
– then there are indeed sometimes problems with European titles which are listed in NY… it’s a Yahoo classic
– as you mention there are also exceptional dividends which are sometimes, but not always taken into account

Personally I have to say that I prefer them not to be rated. I am not a fan of these exceptional dividends. Of course, it is always a good surprise, but I prefer a predictable company, which offers reasonable and above all increasing dividends year after year. So you have your answer to your subsidiary question…
This is also why I don't focus too much on the Yield, it is by far not the most important indicator. Besides, I prefer to use an average yield to avoid signals that would be distorted because of a sudden drop in prices or other elements that would pollute this indicator (such as exceptional dividends for example).

Good scholarship.

[Author]

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