Corporate actions
Dividend yield
Annual dividends per share as a percentage of the share price.
How it works
Yield is the income return at today’s price. Because price is the denominator, yield rises automatically when a share falls.
Yield on cost — dividends relative to what you originally paid — is a different figure that grows over time for a company raising its payout.
Where it misleads people
An unusually high yield is usually the market predicting a cut, not an opportunity the market missed. Check whether the payout is covered by earnings and cash flow before believing the number.
Formula
Dividend yield = annual dividend per share ÷ share price × 100Related terms
- DividendA cash payment a company makes to its shareholders out of its profits.
- Payout ratioThe share of earnings a company pays out as dividends rather than reinvesting.
- Dividend cutA company reducing or suspending its dividend.
- Dividend coverHow many times over a company’s earnings could pay its dividend.
Mentioned in
More in Corporate actions
- Earnings announcement
- Dividend reinvestment
- Earnings revision
- Earnings surprise
- Ex-dividend date
- Dilution
- Guidance
- Delisting
All 26 Corporate actions terms · The full glossary, 433 terms
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.