On this page is a price to dividend ratio calculator. Enter a security's price and its annual dividends paid to compute its price to dividend ratio.
Price to Dividend Ratio Calculator
What is the price to dividend ratio?
The price to dividend ratio is the number of times the current price of an asset covers its annual dividend payout. Price is always the current asset price, but the dividend payout can be the trailing twelve months, or use some estimate for the next 12 months.
The inverse of the price to dividend ratio is the dividend yield. The dividend yield is a far more popular metrics than the price to dividend ratio, but the price to dividend ratio can be more useful in limited situations. For example, when comparing to other multiples such as price to earnings or price to cash flow, price to dividends holds up better.
The price to dividend ratio limitations match those on the dividend yield.
Dividend Payback Period
The price to dividend ratio is also shorthand for the dividend payback period, assuming the dividend stays the same. That is, the ratio is also "how many years" the current yield would take to pay back the investment.
Price to Dividend Ratio Formula
The price to dividend ratio formula is:
price\ to\ dividend\ ratio=\frac{asset\ price}{annual\ dividend}Where:
- Asset Price - the total price to purchase the security.
- Dividend - the annual amount of dividends paid by a security.
