What Is Dividend Yield? Meaning & Example
Definition
Dividend yield is the annual dividend per share divided by the share price, expressed as a percentage. It shows the income return from dividends alone.
Related terms
A dividend is a payment a company makes to its shareholders, usually from profits. Dividends are typically paid in cash on a regular schedule, but they are never guaranteed.
Payout RatioThe payout ratio is the share of a company's earnings paid out as dividends. Very high ratios can mean the dividend is hard to sustain.
YieldYield is the income an investment produces, usually shown as an annual percentage of its price. For bonds, yield moves opposite to price.
What is Dividend Yield?
Dividend yield is the annual dividend per share divided by the share price, expressed as a percentage. It shows the income return from dividends alone.
Can you give an example of Dividend Yield?
A $50 stock paying $2 a year in dividends has a 4% dividend yield.