Dividend Yield
The annual dividend income an investment pays, as a percentage of its price.
Dividend yield divides the annual dividend payment per share by the current share price. It tells you the income return you're getting independent of any change in the share price itself — a company can have strong or weak stock performance separately from how much it pays out to shareholders.
Worked Example
A stock trading at $50 that pays $2 per share annually in dividends has a dividend yield of 4% — before accounting for any change in the $50 share price itself.
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