9 Difference Between Eps And Dividend Per Share

1. Earnings per share (EPS) is a ratio that gauges how profitable a company is per share of its stock. 2. Dividends per share (DPS) is the amount of dividends that the shareholders receive on a per-share basis. 3. EPS is the bottom-line measure of a company’s profitability, and it's basically defined as net income divided by the number of outstanding shares. 4. Dividends per share (DPS) is calculated using the total dividends paid out to shareholders over one fiscal year and the number of shares outstanding.  5. DPS can be calculated using the formula (total dividends paid out over a period - any special dividends) ÷ (shares outstanding). 6. Basic EPS = (Net Income – Preference dividend) / number of shares outstanding. 7. The value of earnings per share will give the investor an idea of the value of dividends to expect, as dividends are a portion of the company’s net earnings that are distributed to shareholders. 8. Higher dividends per share may indicate that the firm cannot reinvest enough funds back into the firm. 9. Firm with very high growth rates usually reinvest surplus income, instead of paying dividends.