Editing 1course Stock Market (section)

== Key Metrics to Evaluate Dividends ==

=== 1. Dividend Yield ===
'''Dividend yield''' measures the annual dividend payment as a percentage of the stock’s current price. It’s a quick way to see how much income you can expect relative to the stock price.

=== Example: If a stock pays an annual dividend of $3 and the current stock price is $100, the dividend yield is 3%. ===

=== 2. Payout Ratio ===
'''Payout ratio''' is the percentage of a company’s earnings paid out as dividends. It helps assess whether the dividend is sustainable. A lower payout ratio generally indicates more room for dividend growth.

=== Example: If a company earns $5 per share and pays a $2 dividend, the payout ratio is 40%. ===

=== 3. Dividend Growth Rate ===
'''Dividend growth rate''' is the annualized percentage rate of growth in a company’s dividend over time. Consistent growth in dividends can indicate a company’s commitment to returning profits to shareholders.

=== Example: If a company increases its dividend from $1 to $1.10 over a year, the dividend growth rate is 10%. ===