What does earnings per share mean?
Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share, calculated as net income minus preferred dividends divided by the weighted average shares outstanding.
Is earnings per share the same as dividend per share?
No. EPS is the company's profit per share, while dividend per share is the actual cash or stock distributed to shareholders. Not all earnings are paid out as dividends.
What is a good earnings per share?
There is no universal 'good' EPS—it varies by industry and company size. Compare a company's EPS to its competitors and track whether it grows over time.
Can earnings per share be negative?
Yes. A negative EPS means the company had a net loss during that period, indicating the company lost money on a per-share basis.
How is earnings per share calculated?
EPS equals net income minus preferred dividends, divided by the weighted average number of outstanding shares. The formula is: EPS = (Net Income - Preferred Dividends) / Weighted Avg Shares.