Dividend Yield
InvestingGlossary term
Definition
Annual dividend payment divided by the stock price, expressed as a percentage. A 5% dividend yield means the stock pays $5 annually for every $100 invested.
Related terms
- DividendA portion of a company's earnings distributed to shareholders, typically paid quarterly. Dividends provide a steady income stream in addition to potential stock price appreciation.
- StockA share of ownership in a company. When you buy stock, you become a partial owner with potential to earn money through price appreciation and dividends.
- YieldThe income return on an investment, expressed as a percentage. For bonds, it's the interest payment divided by the price. For stocks, it's the annual dividend divided by the stock price.
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