Definition
Dividend Yield
A stock’s annual dividend as a percentage of its price.
Dividend yield expresses a company’s annual dividend as a percentage of its share price — for example, a $2 yearly dividend on a $50 stock is a 4% yield. It shows the cash income a shareholder receives relative to what they pay for the stock. A very high yield isn’t automatically good: it can reflect a falling share price or a payout the company may struggle to sustain, so it’s worth checking against free cash flow and earnings.
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