Dividend Yield

Dividend Yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price. It is calculated by dividing the annual dividends paid per share by the market price per share of the stock. In this formula, annual dividends per share represent the total dividends a company pays out over a year, divided by the number of outstanding shares, while market price per share is the current price of a single share of the company's stock. This ratio is a key indicator for investors, particularly those seeking income from dividend payments, as it shows the return on investment from dividends relative to the stock price. Dividend Yield is especially important in sectors where income generation is a significant aspect of stock performance, such as utilities or real estate investment trusts (REITs).