Average Dividend Yield

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Channel News Asia  Dec 16  Comment 
The 30 stocks that make up the benchmark STI index paid an average dividend yield of 3.4 per cent over the last twelve months as of mid December. This is according to the latest data released by the Singapore Exchange (SGX) on Monday.
tickerspy.com  Jun 29  Comment 
We're excited to tell you about two new features that will make tickerspy even more useful for investors. In response to Member requests, we've added dividend yield data to the stock lists on your portfolio pages, as well as to all Index and...
All Allan  Apr 1  Comment 
The Biotechnology Basket suffered a 73% loss with GNVC.  Yet, two weeks after inception, the basket is up 3.36% or about 87% on an annual basis: This is what works in Basket Theory.  Spread the risk and reward across multiple stocks,...
Canadian Business Blog  Dec 5  Comment 
Unless December stages a spectacular gain of 12.1%, the 2000s will be the first losing decade in 90 years for the S&P 500 index (on a total return basis), according to the Dec. 9 edition of Standard and Poor’s The Outlook newsletter. Even during...




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Average Dividend Yield is the average a company pays out in dividends relative to its share price over a specified period of time

Average dividend yield is simply a measure of a company's mean dividend yield over a specified period of time. It differs from standard dividend yield in that standard dividend yield refers only to a company's current yield, or rather, the most recent year's dividends divided by share price. As this number may fluctuate year over year as company earnings and share price change, Average Dividend Yield seeks to provide a clearer picture of what a company's dividend yield has been year after year. A company's average dividend yield, then, will be the average of its yearly dividend yield over however many years the average is to be calculated for.

Average dividend yield is most generally used to look for anomalies in company dividend yields. If a company posts a dividend yield vastly divergent to its average dividend yield over, say, ten years, it may be an indicator of anomalous earnings or share price or both.

Example

An investor wants to know the average dividend yield for a company over the past 5 years. The dividends and price-per-share were as follows:

In 2003: Dividend = 50 cents, Share Price = $10.00, Dividend Yield = 5%
In 2004: Dividend = 60 cents, Share Price = $13.00, Dividend Yield = 4.6%
In 2005: Dividend = 70 cents, Share Price = $19.00, Dividend Yield = 3.7%
In 2006: Dividend = 40 cents, Share Price = $9.00, Dividend Yield = 4.4%
In 2007: Dividend = 30 cents, Share Price = $15.00, Dividend Yield = 2%

This means that between the years 2003-2007, the company's average dividend yield is (5% + 4.6% + 3.7% + 4.4% + 2%) / 5 years = 3.94%. In other words, the company paid a dividend which averaged about 3.94% of its given share price between 2003 and 2007.


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