Stock Market Dividends

[Fitch]

So having played this game for, well since it's been out....I thought I'd had the Market figured out, I realize that I don't.........

I'm wondering, How is the Stock Dividend payed out to the Shareholders??...........I've had the Dividend ramped up to where it's paying out well over a couple million bucks and I should be recieving the vast majority of it, but I never seem to be getting it.........just like my Salary.I never seem to get the full amount.......

So, how are Stock Dividends payed out and my salary as well........Also, whast th edifference between the Dividend and the Earnings per share.....

[Gwizz]

I have not worried about dividends or when Salaries are paid in a few years.  I have long felt it was not worth the trouble.  Now if you are very competitive than it could make a different.

Dividends do give you a few more dollars into your personal account; But, I usually want to keep the dividends in the RRs account.  I don't remember when the dividends or the Salary is paid for sure;  But, I think once a year.

The dividend is what you, as the chairman, earn by owning shares.  It is paid to you out of your RRs account. 

[thomasjordan]

Salary is paid monthly, 1/12 per month.

Dividends are paid quarterly, 1/4 of the annual dividend every 3 months.

Both come from the railroad's operating funds, and both increase your personal net worth.  Since there are some scenarios that require you to have a high personal net worth, then paying highing dividends is usually necessary in those scenarios.  Otherwise, there is no need to pay dividends at all unless your railroad has more money than you know what to do with.

[Hawk]

Man, is that an enlightenment.  ;D

Now I think I understand it a little more. I was a bit confused about that myself.

[Fitch]

Ok..so then whast the Difference between the Dividend and Earnings per Share??

Something tells me they should be the same....but they're not...

[Gwizz]

I'm not sure how the game treats earning per stock owned. 

I would guess some of it is simple dividends and possibly some is the increased value of the stock.

If this is correct your earnings per share could go up or down depending upon the up or down movement of stock value.  Just a guess. 

[thomasjordan]

Take a course in basic economics.

Dividends and earnings per share have nothing to do with each other.

Earnings per share are a firm's net profit divided by its total shares of outstanding stock.  If your railroad earns $100,000 in a year, and your railroad has 10,000 shares of outstanding stock, then the earnings per share are 100,000/10,000 = $10 per share.

Dividends are the amount of money that the firm elects to pay to share holders.  In Railroad Tycoon,  you can pay out a dividend as long as you have cash in the bank.  It does not matter if you made a profit or took a loss that year.

[MattC13]

IDK much about real ecomonics, but I'm good with the RT2 market. Usually if I want a game to last longer I destroy other companies with buying shares and then merging. It's worked 5 times of 12.

[Fitch]

Funnily enough, When I need Cash..thast how I Get it...I buy up shares and then Merge....

[TheDS]

Buying another railroad is usually a bad proposition if your goal is to make money. First, their track tends to be laid out much more inefficiently than necessary, second their stations tend to need either upsizing or moving into proper positions, and third, their engines tend to be the worst possible choice - the AI chooses engines based on unloaded top speed and doesn't consider the terrain. All this is because the AI doesn't have to make money the way you do, they just get it. I haven't paid close attention, but it seems to me they get a stipend plus inflated delivery charges and pay less maintenance.

The reasons you buy another railroad are either because it's part of the scenario, because you need a ton of track built that would cost you too much to build yourself in the limited time available (again, a scenario reason), or because you just have a vendetta against those dirty cheating AI players. The moment you buy it, that track now has to operate by the rules, which means it's going to lose you a lot of money. VERY rarely is a railroad doing poorly enough for you to buy a majority of stock, THEN doing well enough you can buy it for its large cash reserve that its player is too afraid to divert into dividends.

As to the original question, thomasjordan has provided the bulk of the right answer, but there's a little more to it: if you're in the red, you're paying interest on that money. This applies whether it's your RR operating fund or your personal cash, and the interest percentage is huge. This steadily drains your money, so that if you're 10M cash in debt, you need to be earning a considerable amount from your dividends and paycheck just to break even.

Also, having a high dividend percentage alone doesn't help. A $50 dividend paid when you own 1% of the company isn't worth as much as a $10 dividend when you own 50% of the company. So you have to own a large share of a given company AND receive a high dividend to make a lot of money. This means you either go into a lot of debt (and risk getting flattened in a downturn) or you buy slowly and run the risk of having your company getting bought out from under you.

Complicating it all is that your dividend payments are dependent on how much money your railroad can make. By the time you're M$1 cash in debt, your salary is pretty unimportant - 90%+ of your income should be coming from dividends. A profitable railroad is a money engine. Since AI railroads get unfair bonuses, buying their stock often allows you to make a little money off their work too, so buying stock in them isn't a bad idea. (Complicating THIS is that AI railroad profit seems inversely proportionate to your investment in them, the ba*ds.)

[JSS]

TheDS, I do believe you need to qualify your statement

[TheDS]

That's what the word "usually" was for.  ;D

IME, buying a railroad only gives the owner money with which to start a new railroad, and this time he'll own more of the stock so you can't buy it from him. I instead get to 50% of theirs and mine, then pause, takeover, destroy, go back to my railroad, and resume. This way, I make money (or buy down my debt) and there's a good chance the stock value tanks enough that the other player sells it for a massive loss and can't afford to start a new railroad.

If my company needs money, I issue stock every year, or toss out some bonds. Or I may look for knots that need untangling. Or sometimes I just have to wait it out. But I've almost never gained anything by buying another railroad and using it.

[JSS]

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[Gwizz]

I enjoy taking over AI rail.

I seldom merge with an AI unless I need a major AI station, track, locos, etc.

I will maintain about 50 to 60 percent of its' stock so I can come back later and issue its' stock and still keep control.  I will run AI trains on my track to reduce the AIs value.

If I need to disable the AI chairman net worth, I run the AI trains on my railroads track. 

I then sell all stock I own in the AI Railroad to reduce the chairman net worth in his stock.

Their use of my rails will add money to my railroad.

Generally the AI railroads serve my Railroad by supplying low value cargo to my industries or to a drop station where I can pick up for a long run on straight level track. 

I also use then to double track my Railroad.  This could be called a cheat, But it was done in real life by the Tycoons.  If I plan to merge an AI, I will sometimes max out their bonds if their rating is better than mine.  This is a bit risky depending upon the goals of the map.

[JSS]

Gwizz, the deciding facture would be why we play that particular game. I usually play to win. Preferably the current game in less time than the last one.

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[Gwizz]

Quote "Like I said Gwizz, nothing wrong with what you are doing. We just have a different style of playing."

I think different play styles is what keeps the Railroad tycoon matrix alive.

I've been playing an African Map off and on for a week, one that I modified.

I started with 6 AI players.   I have 20 locos and the AIs have about 80 locos that haul the low value cargo and serve my Railroad. Did some merging with one of the AIs. I ended up with two AI managers that rebuilt and own 100 percent of their new Railroads.  One built a profitable line.  I took another AI that I control and built a short route next to the AIs route by using two large stations.  I used single track and one loco.  

Tycooning is fun for me and I will see if I can break this AI using this method.  

I have no plans to try for a win on this map play through.

But I might just win despite myself.