Dividend Yield

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SeekingAlpha  6 hrs ago  Comment 
By Donald van Deventer: Traditional analysis of common stocks uses a wide array of financial ratios to measure value. One of the ratios most often discussed is the dividend yield on a stock. In this note we explain why the dividend yield ignores...
SeekingAlpha  Apr 9  Comment 
By Donald van Deventer: Traditional analysis of common stocks uses a wide array of financial ratios to measure value. One of the ratios most often discussed is the dividend yield on a stock. In this note we explain why the dividend yield ignores...
SeekingAlpha  Mar 25  Comment 
By New Capital: City of London Investment Group (OTC:CLIUF) is an asset manager that focuses on closed end fund (CEF) investment for institutional clients. Decrease in funds under management has caused share price to drop 50% and the stock...
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Benzinga  Mar 12  Comment 
Below are the top publishing-books stocks on the NYSE and the NASDAQ in terms of dividend yield. Courier (NASDAQ: CRRC) has a dividend yield of 5.20%. Courier's shares closed at $15.72 yesterday. Pearson plc (NYSE: PSO) has a dividend yield...
SeekingAlpha  Feb 24  Comment 
By Renu Singh: CenturyLink (CTL) is an American communications company that provides communications and data services to residential, business, governmental, and wholesale consumers. The company recently released its fourth-quarter financial...
Mondo Visione  Feb 19  Comment 
A new db x-trackers from the ETF section of Deutsche Asset & Wealth Management has been tradable in the XTF segment on Xetra since Wednesday. ETF name: db x-trackers MSCI North America High Dividend Yield Index UCITs ETF Asset class: equity...
SeekingAlpha  Feb 18  Comment 
ByIAEResearch: For some investors dividend income is more important than the capital gains and these investors build their portfolios with dividend stocks. We have been trying to find and share some good dividend stocks to add to the knowledge of...
StreetInsider.com  Feb 11  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Dividends/Anadarko+Petroleum+%28APC%29+Declares+Flat+%240.18+Quarterly+Dividend%3B+Yields+0.9%25/9153254.html for the full story.
StreetInsider.com  Feb 11  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Dividends/SunTrust+Banks%2C+Inc.+%28STI%29+Maintains%2C+Declares+%240.10+Qtr.+Dividend%3B+Yields+1.1%25/9151744.html for the full story.




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Dividend Yield is the percentage return a company pays out to its shareholders each year relative to its share price

Dividend yield is calculated as Annual Dividends per Share / Price per Share

This measurement tells you what percentage return a company pays out to shareholders in the form of dividends. Well-established companies tend to pay out a higher percentage, and with greater consistency, than do younger or more volatile companies. However, some companies choose to use the cash for re-investment in the company, potentially leading to a higher share price in the future. Therefore, it is not necessarily true that shareholders are better off investing in companies that pay higher dividends, though a consistently high dividend yield is often considered a sign of a stable, consistent, business.

It should be noted that companies do not announce a dividend yield per se, but rather a total dividend per share, the yield then being calculated from the current share price. Thus, a company with a particularly volatile stock price may see drastic swings in dividend yield despite a consistent dividend. As such, an increasing dividend yield over some period of time (quarterly, annually, etc.) while the dividend itself remains stable is often considered a sign of an artificially low (i.e. undervalued) stock price.

Examples

  • If XYZ company’s annual dividend is $1.50 per share and the stock is trading at $25, XYZ Dividend Yield is 6%. ($1.50 / $25 = 0.06)
  • If Company ABC announces annual dividends of $1.50 per share and the stock is trading at $45, ABC's Dividend Yield is 3.3%. ($1.50 / $45 = .033)

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