Greater Fool glossary / Valuation & Fundamentals

dividend yield

Dividend yield is the annual dividend payment divided by the stock's current price, expressed as a percentage. It tells you what return you are receiving from dividends alone, not counting any gains or losses from the stock price itself.

In practice

A stock trading at $100 pays $2 in annual dividends. The dividend yield is 2 percent. If you bought the stock at this price, you would receive a 2 percent annual return from dividends.

Greater Fool is a free Chrome extension that explains terms like this in place. Highlight a word on any page, click Explain, keep reading.

Add to Chrome (free)