What Is Dividend Yield? (#54)

What Is Dividend Yield?

Dividend Yield is the percentage of a company's share price that it pays out in dividends.

→ Related: What Are Dividends?(#31)

How Is Dividend Yield Calculated?

Take the annual dividend paid per share (typically based on the past year) and divide it by the current share price. Multiply the result by 100 to express it as a percentage.

Formula:

Dividend Yield = (Annual Dividend Per Share ÷ Current Share Price) × 100

A Worked Example

Say a company paid an annual dividend of $10 per share last year, and its current share price is $100.

(10 ÷ 100) × 100 = 10%

Dividend Yield = 10%

That's the full calculation. In practice, real companies rarely land on such clean, round numbers — these are simplified figures purely to make the math easy to follow.

That covers how dividend yield works and how to calculate it. Thanks for reading.

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