Dividend Yield

Dividend yield is a financial metric that measures the income from dividends relative to the value of an investment. It shows how much a company, fund, or portfolio has paid out in dividends each year relative to its price, NAV (Net Asset Value) or level (for portfolios). Expressed as a percentage, it helps investors understand the return they can expect from dividends alone, without considering any changes in the price, NAV or level. For example, if a stock trades at $36 and pays $1.80 in dividends over the course of one year ($.45 per quarter), the company's dividend yield is 5%.

Companies that pay dividends tend to have consistent positive net income and companies with higher dividend yields tend to have business models that allow them to pay out more dividends from net income, for example real estate and consumer defensive stocks. Selecting investments with stable or high dividend yields can provide relatively stable cash flows, but it is important to remember that higher dividend yields do not always signal attractive investment opportunities, as an investment’s dividend yield can be high due to a falling price/NAV/level. Dividend yield is available for the following security types on YCharts: stocks, mutual funds, ETFs, Closed End Funds (CEFs), and portfolios.

YCharts calculates dividend yield as the sum of common dividends per share issued in the last 365 days divided by the current share price. The trailing twelve-month period ends on the date of the most recent dividend payment, not the price quote date. Included dividend types are normal, non-qualified, qualified, tax-free income, interest income, foreign, and domestic. We allow a dividend yield to persist for 365 days after a dividend cut, so this data is not suitable for backtesting. For accurate historical testing, the announcement date of dividend changes should be used to determine correct dividend yield as of a given date.