1. What is Dividend Yield?

Dividend Yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price. It's expressed as a percentage and is a key metric for income investors.

2. How Does the Calculator Work?

The calculator uses the Dividend Yield formula:

Where:

• Annual Dividend — Total dividends paid per share annually (in dollars)
• Stock Price — Current price of one share of stock (in dollars)

Explanation: The formula calculates what percentage of the stock price is returned to investors as dividends each year.

3. Importance of Dividend Yield

Details: Dividend Yield helps investors compare income-generating stocks and assess the return on investment from dividends alone, independent of stock price appreciation.

4. Using the Calculator

Tips: Enter the annual dividend per share and current stock price in dollars. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's considered a good dividend yield?
A: Generally 2-6% is considered good, but this varies by industry. Very high yields (>10%) may be unsustainable.

Q2: How often are dividends paid?
A: Most commonly quarterly, but some companies pay monthly, semi-annually, or annually.

Q3: Does dividend yield change?
A: Yes, it changes whenever either the dividend amount or stock price changes.

Q4: Should I only look at dividend yield when investing?
A: No, also consider dividend growth, payout ratio, and company fundamentals. High yield alone doesn't mean a good investment.

Q5: How is this different from dividend payout ratio?
A: Payout ratio shows what percentage of earnings are paid as dividends, while yield shows return relative to stock price.