The stock table provides you with essential information about the company's stock price (valuation). The following tutorial will guide you through the various data that is presented in a stock table. Being able to understand a stock table is very helpful when investing.
We will present and provide examples for the following topics:
The stock table provides you with essential information about the company's stock price (valuation). The following tutorial will guide you through the various data that is presented in a stock table. Being able to understand a stock table is very helpful when investing.
Let us begin with an example of a table that could be found in the financial section of a major newspaper such as The Wall Street Journal. The Wall Street Journal is not the only newspaper that provides information on the stock market; many other local and national newspapers also provide this service. However, the information is usually presented in a similar manner. To improve your understanding of stock tables please review the following example:
EXAMPLE OF A TABLE
The date is the date at which the trading activities occurred, not the date of the newspaper. Stocks are always listed alphabetically, from A to Z. The following data is presented for shares of a hypothetical company named "XYZ CORP."
We will begin by explaining the first four columns.
STOCK MARKET TABLE TERMS
(1) High-Low. The first column is the highest and lowest prices at which the stock was sold in the past year (52 weeks). In our example, the highest price was $47 and the lowest was $37.
(2) Company Symbol. The second column is the abbreviated name of the firm issuing the stock. The symbol of the company stands next to the abbreviated name. In our case, it is "Z." This symbol is sometimes referred to as the company's "ticker symbol."
(3) Dividends. Dividends are the amount a company pays to its stockholders. The third column is the annual dividend paid per share. In our example, it is $2.30.
(4) Volume. The fourth column titled "VOL" implies the volume of shares (in 100s) that were traded that day. In our example, on August 22, 1999, 33,500 shares were traded by XYZ. Volume may give you an indication on the size of the breadth of the market for a company's shares.
(5) The YLD column approximates the dividend yield. The dividend yield is the current return on invested capital. We can use it to compare dividend returns for firms that have different stock prices. We derive the dividend yield by dividing the current dividend by the closing stock price. In our case the dividend yield is 5%, calculated as follows:
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Dividend
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$2.30
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= 5.427%
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Price (8th column)
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$42.375
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(6) The 6th column is the price to earnings (P/E) ratio.
The P/E ratio compares the price per share to the earnings per share.
It shows how much an investor is willing to pay for $1 of current
earnings per share (EPS). Price/Earning ratio is calculated by dividing
the price by the earnings per share (EPS). Applying this formula
to our example we get the following:
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Price (8th column)
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$45.375
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= 10
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(the stock is selling for 10X the earning ratio)
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EPS
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$4.27
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(7) The seventh column titled "Hi Lo" represents the highest and lowest prices at which trades were completed during the last trading day. In our example, the high was at $43 and the low was at $40.
(8) The eighth column titled "Close" is the last price at which a trade was made during the trading day. In our example it is $42-3/8 ($42.375).
(9) Finally, the last (ninth) column of the table titled "Net Chg" stands for the change between the closing price for previous day and the current day. Let us say XYZ closed at $41 3/8 on the preceding business day; hence on August 23, 1999 it closed higher by $1. The Net change is measured in dollar value.
Note: Many newspapers, such as Investor's Business Daily, often change the sequence of the provided information. Some newspapers may provide less information (e.g., only providing the closing price and not the high and low for the day).
This concludes our tutorial on reading the stock market table.
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