Jim re IDCC's dividend you asked:
....."Given that in your opinion at this price level what might be a proper dividend? .....One poster said it's a 0.07 % dividend we are getting."
Jim IDCC's current dividend yield based upon today's closing price of $58.25 and a 10 cents per quarter or 40 cents per year dividend, = .69%, (40 cents / $58.25), not .07%. (I think the .07% amount was due to not moving the decimal point two places to the right, which is necessary in order to calculate a percentage). Many technology company's are paying between 1% to 2% dividends. When IDCC stated that they would pay a dividend on Oct. 17, 2010, the dividend yield was 1.28% based upon a closing price on that date of $31.28. The dividend yield was reasonable at that point in time. It is somewhat low now due to the rapid increase in IDCC's share price.
From a repost of mine on Dec 20 as follows:
rmarchma Share Monday, December 20, 2010 4:53:59 PM
Re: JimLur post# 303175 Post # of 311529
Jimlur re dividend yield you asked:
..."Ron I have a question RE the dividend and would like you to do the math for me......IMO on 10/27/2010 when they announced they will be paying a dividend I believe at that time the dividend amount was decided on the closing price of the stock the day the news came out..... We closed at $31.28 that day so what % is that? I'm curious if it's 1 1/2 or higher.......It was also mentioned here that some might want to base what % they get be based on their cost basis which is a good point."
Jim the formula to calculate a stock's cash dividend yield as follows:
Annual Cash Dividend per share / Stock Price per share
If you use the equal key on your calculator, then you will need to move the decimal point to places to the right to convert to a percentage yield. However, if you do not use the equal key, but rather use the % key on your calculator, then the final number is already stated as a percentage. The big variable is what you choose as the stock price, ie, the ending share price on a certain date in the past, the ending share price today, or the share price that you actually paid for the stock. For example:
(a) using IDCC's ending share price on Oct 17, the day IDCC said that they would pay a cash dividend, the dividend yield is 1.28% ($.40 annual dividend per share / $31.28 IDCC ending share price on Oct 17).
(b) using IDCC's ending share price on Dec. 13 , the day IDCC announced the amount of the cash dividend, the dividend yield is 1.02% ($.40 annual dividend / $39.09 IDCC ending share price on Dec. 13).
(c) using IDCC's ending share price today, the dividend yield is .94% ($.40 / $42.63). I attribute much of IDCC's share price increase today of over 9% to the Cramer promotional segment. BTW published dividend yields on sites like Yahoo Finance use the latest closing share price of the stock for the current dividend yield figure.
(d) now assume that someone purchased IDCC shares for $20 several years ago. Then the dividend yield using the shareholder's original cost price would be 2% ($.40 / $20 assumed cost basis).
AI
