Investing term
What is Dividend yield?
Annual dividend per share ÷ share price. The cash income the stock pays out as a percentage of price.
Dividend yield is a stock's annual dividend per share divided by its price — the cash income it pays as a percentage. It lets you compare the income from different stocks, but a very high yield can be a warning, not a gift: it often means the price has crashed because investors expect the dividend to be cut.
For example
A $50 stock paying $2 a year yields 4%; if the price falls to $25 the yield "jumps" to 8% — often a sign the market doubts the payout will last.
Dividend yield is taught hands-on in Stage 15 — Valuation for Investors.
See the lesson →