Dividend yield is a company's annual dividend per share divided by its current share price, shown as a percentage. It tells you the income return you would receive at today's price, separate from any change in the share price itself.
Because price sits in the denominator, the yield moves opposite to the share price. A falling share price pushes the yield up, which is why an unusually high yield can be a red flag rather than a gift — the market may be pricing in a coming dividend cut.
A healthy yield is one the company can comfortably afford to keep paying from its profits. Yield is best read alongside whether the dividend is growing, stable, or stretched, not chased on its headline number alone.
Worked example
A stock paying $2 a year in dividends and trading at $40 has a dividend yield of 5%.
This definition is general education, not investment advice. Markets — especially crypto — are volatile and you can lose money. Please read our disclaimer and see our methodology.
Related terms
Frequently asked questions
What does Dividend yield mean?
A company's annual dividend per share divided by its share price, expressed as a percentage. It shows the income return at the current price.
Is Dividend yield a crypto or a stock-market term?
It is primarily an equities and stock-market term.
Is this Dividend yield definition financial advice?
No. The Market Capitalize glossary is educational — it explains terms and concepts, never a recommendation to buy or sell. See our disclaimer.