Stocks & Investing

Dividend Yield

A stock’s annual dividend as a percentage of its price.

Dividend yield lets you compare income across stocks. It is the annual dividend divided by the share price. A yield that is unusually high often means the price has fallen on bad news, so treat a fat yield as a question ("why so high?"), not automatically a bargain.

For example

A $25 stock paying $1.72 a year yields about 6.9%. If the price drops to $20, the same $1.72 now yields 8.6%.

Related terms

DividendStock

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