Dividend Yield Calculator
Calculate dividend yield, annual dividend income, and evaluate income-generating investments with our free dividend yield calculator.
Category: Financial
How often dividend payments are made
Frequently Asked Questions
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's calculated by dividing the annual dividend per share by the price per share, and is expressed as a percentage. A higher dividend yield indicates that a company is paying out a higher percentage of its share price as dividends.
How do I calculate dividend yield?
To calculate dividend yield: 1) Find the annual dividend per share (if paid quarterly, multiply the quarterly dividend by 4), 2) Divide the annual dividend by the current stock price, 3) Multiply by 100 to get a percentage. For example, if a stock pays $2 in annual dividends and costs $50 per share, the dividend yield is ($2 ÷ $50) × 100 = 4%.
Is a higher dividend yield always better?
Not necessarily. While a high dividend yield can indicate a good income investment, it can also signal potential problems. An unusually high yield might result from a falling stock price (due to company problems) rather than increased dividends. It's important to evaluate the company's overall financial health, dividend history, payout ratio, and growth prospects when assessing dividend investments.