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Dividend yield

Dividend yield Definition

The dividend yield on a company stock is the company's annual dividend payments divided by its market cap, or the dividend per share divided by the price per share. It's often expressed as a percentage.

Example:

General Electric Co.

  • Share price: $36.00
  • Annual dividend: $0.88
  • Dividend yield: 2.44% (0.88/36.00)

Historically, a higher dividend yield has been considered to be desirable among investors. A high dividend yield is considered to be evidence that a stock is underpriced, whereas a low dividend yield is considered evidence that the stock is overpriced.




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