The IC often quotes yield or earnings per share (EPS). Do these terms mean receipts in the form of dividends after deduction of tax by the company (but separately subject to whatever tax applies to the recipient)? Does yield prima facie mean payments made or being made in the current year on the basis of declared dividends? Again, does prospective yield mean anticipated yield in a later year as calculated by a third-party commentator, eg IC or an analyst?
A good example of where definition of these terms is important arises on page 54 of the 26 October edition where Stobart is discussed and recommended. In the summary it is stated that Stobart has a dividend yield of 8.7 per cent and a price of 207p. Does IC mean that an investor could expect to receive 18p per share? Conversely, the text of the article states that on the basis of Stifel’s analysis Stobart is estimated to generate EPS of 2.9p in the current year. This is a rather different sum.
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