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Hundreds of Stocks Will Rise Thanks to This Powerful Force
The secret to making money in stocks isn't just finding a great company -- it's finding a great company that is poised to benefit from a major catalyst.

The Special Asset Class Legally Obligated to Pay Yields of 8%, 9%, 10%... And Even Higher
With a history of rising distributions and strong outperformance these shares can offer shelter from the storm.

This Preferred Stock Outperformed S&P by +44%
It also makes monthly payments and has a 10.3% annual yield.

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Earnings Per Share (EPS)

What it is:
The term earnings per share (EPS) represents the portion of a company's earnings, net of taxes and preferred stock dividends, that is allocated to each share of common stock. The figure can be calculated simply by dividing net income earned in a given reporting period (usually quarterly or annually) by the total number of shares outstanding during the same term. Because the number of shares outstanding can fluctuate, a weighted average is typically used.

How it Works/Example:
Let's assume that during the fourth quarter, XYZ Corp. reported net income available to common shareholders of $4 million. Over the same time frame, the company had a total of 10 million shares outstanding. In this particular case, the company's quarterly earnings per share (or EPS) would amount to $0.40, calculated as follows:

$4 million in earnings divided by 10 million shares = EPS of $0.40

Why it Matters:
EPS is a carefully scrutinized metric that is often used as a barometer to gauge a company's profitability per unit of shareholder ownership. As such, EPS is a key driver of share prices. It is also used as the denominator in the frequently cited P/E ratio.

EPS can be calculated via two different methods: basic and fully diluted. Fully diluted EPS -- which factors in the potentially dilutive effects of warrants, stock options, and securities convertible into common stock -- is generally viewed as a more accurate measure and is more commonly cited.

EPS can be further subdivided according to the time period involved. Profitability can be assessed by prior (trailing) earnings, recent (current) earnings, or projected future (forward) earnings. Though EPS is widely considered to be the most popular method of quantifying a firm's profitability, it's important to remember that earnings themselves can often be susceptible to manipulation, accounting changes, and restatements. For that reason, free cash flow is seen by some to be a much more reliable indicator than EPS. Nevertheless, EPS remains the industry standard in determining corporate profitability for shareholders.



Income Security of the Month
If you're looking for high yields, monthly payments and unprecedented safety from your investments, then you need to learn more about our "Income Security of the Month" for November 2008. This stable preferred stock has a long track record of paying some of the most solid dividends in Wall Street history. In fact, the preferred issue pays a monthly dividend totaling 10.3% annually and has outperformed the S&P 500 by more than +44 percentage points over the last year!

 

Top 10 Stocks for 2008!
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High-Yield Investing
If you're looking for both high yields and enormous capital gains, then you need to learn more about our "Income Stock of the Month."

 

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