See Also:
Dividends
Dividend Payout Ratio
Financial Ratios
Dividend Yield Analysis
Dividend Yield DefinitionDividend yield indicates how much dividend a company paid to its investors relative to its stock price.
Dividend Yield FormulaDividend Yield ratio = Annual dividends per share รท Price per share
Dividend Yield CalculationExample: a company pays annual dividend of $1 per share and its stock price is $20.
Dividend yield = 1 / 20 = 5%
This means that investors can get $0.05 dividend for every dollar invested.
ApplicationsDividend yield measures what percentage return a company pays out to its shareholders. In general, well-established companies may have higher dividend yield, while growing companies may have lower ones. For investors, a company with a high dividend yield may be a good investment if the rest of their fundamentals fall into line also.
ResourcesFor statistical information about industry financial ratios, please click the following website:
www.bizstats.com and
www.valueline.com.