What Is Dividend Yield and How Do You Calculate It?
What is dividend yield?
Yield converts a company's dividend into a percentage you can compare across stocks. Formula: Annual Dividend ÷ Share Price.
What's a 'good' yield?
0–1% is typical for growth tech. 1.5–3% is the market average. 3–5% is mature payers. Above 8% often signals a coming dividend cut.
Why can a high yield be a trap?
Yield rises when share price falls. A high yield often means the market expects the dividend to be cut.
Frequently asked questions
How often are dividends paid?
Most US companies pay quarterly. REITs and BDCs sometimes pay monthly.
Do all stocks pay dividends?
No. Many growth companies (Amazon, Berkshire Hathaway) reinvest profits instead.
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