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What is dividend yield?

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Quick answer

Dividend yield is the annual dividend a stock pays expressed as a percentage of its price. If a $100 stock pays $4 a year, its yield is 4%. It helps investors compare how much income different dividend-paying stocks provide. It's annual dividends as a percent of share price.

Key things to understand

  1. It's annual dividends as a percent of share price.
  2. Higher yield means more income per dollar invested.
  3. It moves opposite to price: if price falls, yield rises.
  4. Very high yields can signal risk, not just reward.

People also ask

What is dividend yield?
A stock's yearly dividend as a percentage of its current price, showing the income it provides.
How do you calculate dividend yield?
Divide the annual dividend per share by the share price, then multiply by 100.
Is a high dividend yield always good?
Not necessarily — a very high yield can mean the price has fallen due to trouble, risking a dividend cut.