One of the best ways to evaluate a potential investment is by its profitability, which is also known as the earnings available to common stockholders. Basically, this is the company’s profits after all expenses have been paid, including dividends to preferred stockholders.
Ideally, a company’s available earnings will be steadily increasing over time and will be high relative to the company’s share price. Here’s how to find, or calculate, earnings available to common stockholders to help you assess the profitability of stocks you’re interested in.