This article is from the Glossary of Stock Investing Terms.
A dollar amount assigned to a security when first issued. For stocks, par is usually a small dollar amount that bears no relationship to the security's market price.
The date on which a declared stock dividend is scheduled to be paid.
The percentage of earnings paid out in dividends, calculated by dividing dividends per share by earnings per share. The payout ratio provides an idea of how well earnings support the dividend payments - the lower the ratio, the more secure the dividend.
Published daily by the National Quotation Bureau with quotations for lightly-traded over-the-counter stocks.
An investor's ownership of a security, either long or short.
A class of ownership in a corporation with a stated dividend that must be paid before dividends to common stock holders. Preferred shareholders have a claim, prior to common stockholders, on earnings and assets in the event of liquidation. Preferred stock does not usually have voting rights.
Compares a stock's market value to its book value, calculated by dividing the current price by common stockholders' equity per share (book value). Sometimes known as "Market-to-Book."
Abbreviated as P/E Ratio or P/E. Sometimes referred to as the "multiple." Calculated by dividing the stock's current price by the company's current annual earnings per share, usually from the last four quarters (known as the Trailing P/E Ratio), but sometimes from the estimates of the earnings expected in the next four quarters (the Projected P/E ratio), or from the sum of the last two actual quarters and the estimates of the next two quarters. In and of itself, the P/E Ratio tells very little, but can be usefully compared to the P/E Ratios of other companies in the same industry, or to the market in general, or to the company's own historical P/E Ratios, in order to determine how much the market is currently willing to pay for a share of the company's earnings.
Calculated by dividing a stock's P/E Ratio divided by its Earnings Per Share growth rate, to provide some indication of the value the market has put on a company's earnings expectations compared to what the company has actually earned in the past.
Calculated by dividing a stock's market price per share by its book value per share. An attempt to determine a value for a stock compared to the value of its assets. A lower Price-To-Book Ratio might imply a stock is undervalued.
Calculated by dividing a stock's Price per share by its Cash Flow per share, to determine the market's expectation of a company's financial liquidity.
Calculated by dividing a stock's current Price by its Revenues per share. Another technique for finding a stock's valuation relative to its own past performance, other companies or the market itself.
The first opportunity investors have to buy a newly-issued security. After the first purchases, subsequent trading is said to occur in the secondary market.
Calculated by dividing annual net earnings after taxes by revenues, displayed as a percentage. Useful to compare stocks within industries; a higher profit margin indicates a more profitable company. Can also be calculated by dividing a company's pre-tax earnings by its revenues, known as the Pre-Tax Profit Margin. Since taxes can vary from year to year and from company to company, this may give a truer picture of a company's underlying profitability.
Computerized trading used primarily by institutional investors, typically for large volume trades, where orders from the trader's computer are entered directly into the market's computer system and executed automatically.
A formal written statement that discloses the terms of a public offering of a security or a mutual fund. The prospectus is required to divulge particular essential information to investors about the proposed offering.
A formal document signed by a shareholder to authorize another shareholder, or commonly the company's management, to vote the holder's shares at the annual meeting. The Proxy Statement discloses important information about issues to be discussed at an annual meeting, as well as information about closely-held shares.