Earnings Per Share

Earnings per share (EPS) is net income available to common shareholders divided by the weighted-average number of common shares outstanding for a stated period. Basic and diluted EPS use different share counts.

A simple example

If a company reports $100 million of net income available to common shareholders and a weighted-average 50 million common shares, basic earnings per share are $2. A diluted figure may use a larger share count.

Why this matters to income investors

EPS puts company earnings on a per-share basis, making it useful for comparing earnings with dividends per share and share price.

How to use earnings per share in your research

Confirm whether the figure is basic, diluted, GAAP or adjusted, then compare the same earnings basis across periods. For dividend analysis, use the earnings measure that fits the company’s structure.

This material is general education and information, not individualized investment, tax, or legal advice.