Equities
Dividend Yield
Dividend yield tells you how much cash income a stock pays relative to its price. A $100 stock paying $3 a year in dividends has a 3% yield. It is a key metric for income-focused investors.
Yields move inversely to price: if a stock falls while its dividend holds, the yield rises. A very high yield can therefore be a warning sign that the market doubts the payout is sustainable.
Dividend-paying stocks, especially in defensive sectors, are prized for providing steady returns and a cushion in volatile markets. Reinvesting those dividends is a powerful driver of long-term compounding.
Example
A stock priced at $50 that pays $2 in annual dividends has a dividend yield of 4%.
Dividend Yield — FAQ
What is Dividend Yield?
Dividend yield is a company's annual dividend per share expressed as a percentage of its share price, showing the income return an investor earns from dividends.
Can you give an example of Dividend Yield?
A stock priced at $50 that pays $2 in annual dividends has a dividend yield of 4%.
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