◈ GLOSSARY · INVESTING
Dividend Yield.
A definition, in plain English — with the books that teach it.
Reviewed by ClearValue Editorial Team · Jun 27, 2026
◈ DEFINITION
What it means
Definition
Dividend yield is the annual dividend per share divided by the current share price, expressed as a percentage. It tells you the cash return you'd earn on the stock at today's price, before any price change. A very high yield isn't always good news — it often means the stock has dropped because the market expects a dividend cut.
◈ IN PRACTICE
Example
A stock trades at $80 and pays $3.20 per share in annual dividends. The yield is 4%. If the share price falls to $50 with the dividend unchanged, the quoted yield jumps to 6.4% — which sounds attractive but may signal trouble.
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