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 is expressed as a percentage and is a key metric for income-focused investors.

2. How Does the Calculator Work?

The calculator uses the Dividend Yield formula:

Where:

• \( Annual\ Dividend \) — Total annual dividend payment per share in dollars
• \( Current\ Price \) — Current market price per share in dollars

Explanation: The formula calculates the percentage return on investment from dividends alone, excluding any capital gains.

3. Importance of Dividend Yield

Details: Dividend Yield helps investors compare income-generating stocks, assess dividend sustainability, and make informed investment decisions based on income requirements.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What is a good dividend yield?
A: A "good" dividend yield varies by industry and market conditions. Typically, 2-6% is considered reasonable, but extremely high yields may indicate risk.

Q2: Does a higher dividend yield always mean better?
A: Not necessarily. Very high yields can sometimes indicate a company in trouble or an unsustainable dividend policy.

Q3: How often is dividend yield calculated?
A: Dividend yield is typically calculated annually based on the most recent dividend payments and current stock price.

Q4: Can dividend yield change over time?
A: Yes, dividend yield changes as both stock prices and dividend payments fluctuate.

Q5: Is dividend yield the only metric to consider?
A: No, investors should also consider dividend growth, payout ratio, and company fundamentals alongside yield.