Dividend yield, explained. The cash a stock pays you each year, as a percentage.

Dividend yield, explained. The cash a stock pays you each year, as a percentage.

Dividend yield is the yearly dividend per share divided by the share price.

Yearly dividend ÷ Share price

A $2 yearly dividend on a $50 stock → 4% yield.

Right now:

$PFE 6.2%

$VZ 6.1%

$XOM 2.5%

$KO 2.4%

$JNJ 2.1%

$AAPL 0.3%

How to read it:

• Yield goes up when the price goes down, even if the dividend does not change.

• Growth companies often pay little or nothing and reinvest instead.

• Look at the payout ratio: what share of profit goes to dividends.

Watch out: A very high yield is often a warning. The market may expect the dividend to be cut.

Save this for later. Next up: Before open, after close.

Education only. For information only, not financial advice.