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 over a year (USD)
• Stock Price — Current price of one share of the stock (USD)

Explanation: The formula calculates what percentage of the stock price is returned to investors through dividends annually.

3. Importance of Dividend Yield

Details: Dividend yield helps investors compare income-generating stocks. High yields may indicate good income potential but could also signal risk if unsustainable.

4. Using the Calculator

Tips: Enter the total annual dividend per share and current stock price. The calculator will show the annual yield percentage and equivalent monthly dividend payment.

5. Frequently Asked Questions (FAQ)

Q1: What's a good dividend yield?
A: Typically 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 pay monthly, semi-annually, or annually.

Q3: Does dividend yield change?
A: Yes, as both stock price and dividend amounts can fluctuate over time.

Q4: Are high dividend yields always better?
A: Not necessarily. Very high yields might indicate a struggling company or an impending dividend cut.

Q5: What's the difference between yield and payout ratio?
A: Yield shows return relative to price, while payout ratio shows what percentage of earnings are paid as dividends.