Dividend yield formula

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Dividend yiled formula is the relationship between the dividends received by the holder of a share and the price or quote from it.

The dividend yield formula is the ratio of the expected dividend for next year and the share price today:

dividend yield formula

Sometimes is calculated with last year dividends instead of next, or with the total dividend payments related to market capitalization:

dividend yield formula

Many managers use the dividend yield as a criterion for selection, choosing those stocks with the highest dividend yield. The logic is simple: get a dividend importantly, only slightly lower than fixed income, and we can get gains if the stock goes up.


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