Learn / Glossary / Dividend yield

Glossary

What is Dividend yield?

Dividend yield tells you how much a stock pays each year compared with its price.

The simple explanation

You divide the yearly dividend per share by the share price. A higher yield means more cash for each dollar invested, but a very high yield can be a warning sign that the price has dropped or the dividend is at risk.

An example

A 100 dollar stock that pays 3 dollars a year has a dividend yield of 3 percent.

Why it matters

It helps you compare income from different stocks on the same scale.

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Educational information, not financial advice.