Dividend per share is the total amount of dividend attributed to each individual share for over a period of one year. It’s a way of measuring the total amount of dividend paid by the company for each share outstanding.
For the calculation of the DPS we take the total amount of dividend pay over the period of one year and we divide it by the number of shares outstanding:
Dividend Per Share (DPS) = Total Dividends Paid / Shares Outstanding
Alternative way of calculating DPS is to multiply the earnings per share by the dividend payout ratio.
Dividend are usually paid in a from of cash payment paid to investors but there are some situation when dividend can be paid in other forms, such as: Stock dividends - this is when the company instead of cash give investors a certain number of extra shares based on the current amount of shares that each shareholder owns. Scrip dividends - this is when the company promises payment to shareholders at a later date. Liquidating dividends - the company liquidates all its assets and pays the sum to shareholders as a dividend, usually done when the company is about to shut down.