Stocks

Dividend yield

Annual dividends per share divided by the current share price.

Plain-English context

Put the definition to work.

ILLUSTRATIVE EXAMPLE

A $2 indicated annual dividend divided by a $50 stock price is 4%; a falling price can raise the displayed yield without improving business quality.

IMPORTANT DISTINCTION

Indicated and trailing yields can differ; a falling share price can raise yield while the dividend is at greater risk.

Further reading and verification. Examples are hypothetical, not current quotes or recommendations. Product terms, tax treatment and market rules can change. Investor.gov — investing glossary

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