Dividend yield

What is Dividend yield?

The dividend yield is the ratio of a company’s annualized dividend compared to its share price.

It is worth noting that the dividend yield is commonly calculated on the basis of ordinary shares and dividends, for example it excludes the payment of special dividends.

Formula:

Dividend yield = Dividends TTM for the primary issue excluding special dividends / Price of the primary issue

What does Dividend yield mean?

Dividend yield shows the percentage of investor income that comes from dividends relative to the share price. It is worth noting that with a sharp drop in the price, the dividend yield will increase sharply. A high dividend yield is not always a good thing. Instead it is simply a way of seeing how much yield an investor can receive for owning a particular company.