The projected annual dividend on a share of stock for the next year, assuming that the firm will pay the same amount of dividends per share for each quarter of the next year. Put another way, an indicated dividend is the most recent quarterly dividend that is annualized, i.e., multiplied by four. Also, it can defined as the per-share amount that a firm pays in dividends each year. This is usually expressed as the dividend rate calculated on the assumption that the firm will keep making payments equal to its most recent one.

The indicated divided is used in the calculation of dividend yield and a payout ratio. For example, a payout ratio can be calculated by taking the stock’s annual indicated dividend and dividing it by trailing 12- month earnings per share (EPS).