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Lesson 14. How to Check Your Investments > Reading the Stock Tables - Pg. 87

How to Check Your Investments 87 The Yield Percent listing's popularity is also due in large part to its easy-to-understand portrayal of the stock as a business. Again, this differs from the Current/Dividend Yield in that instead of having one figure, time provides a number of daily figures illustrating the stock's performance over time figures. To illustrate, imagine buying a business such as a clothing shop. The Current/Dividend Yield figure would represent the price that you, the investor, paid for the business (stock), while the Yield Percent would represent the amount of money (dividends) made by the shop after changing hands. Like a clothing store owner, a stock owner also questions the rate of return on his or her investments. The Yield Percent provides a one-figure answer. As with anything so easy, there is a catch. That one-figure answer is totally dependent on the com- pany's decision on what, if any, portion of its earnings will be paid out to its investors. The Yield Percent is therefore not as much an indicator of how the company is doing as it is an indicator of how the company is being managed--the portrayal of the company that its management wants you, the investor, to see. P.E. Ratio To the right of the Yield Percent column is the Price/Earnings ratio, or P.E. ratio. Even though the name is the same as the Price Earnings ratios (Trailing, Standard, and Forward) discussed in Lesson 12, the figure listed here is not calculated using the stock's dividend payments. Instead, by dividing the P.E. ratio into the stock's current price, the investor can discover the stock's dollar earnings per share. The P.E. ratio in the stock tables is calculated by dividing the issuing company's total earn- Plain English