Most news and investment websites don’t publish the total yield stocks offer. To calculate a firm’s annual distribution, news agencies usually take the most recent dividend and multiply it times the payment frequency. They then divide this number by the stock price to compute the yield. The problem? This number gets thrown off when companies pay out irregular or special dividends. You might see a stock’s yield listed under two percent, but the real distribution could be much bigger.
Take Main Street Capital Corporation (NYSE:MAIN), for example. The firm pays a monthly dividend of $0.19 per share. Based on some grade five math, that comes out to an annual yield of six percent. You’ll find that number reported on most investment sites. In fact, many Income Investors readers would look into this name based on that mid-single digit yield alone. Thing is, Main Street’s real distribution looks even better when you look into it further.
Source: Income Investors
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