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More glossary terms
- JOLTS (job openings and labor turnover survey)
- Earnings per share (EPS)
- Nasdaq composite
- Unit
- Value investing
Dividend yield definition
Dividend yield is the percentage of return you get from a share based on the dividends it pays out.
What is dividend yield?
Dividend yield is the percentage of return you get from a share based on the dividends it pays out. It’s a quick way to see how much income you’re earning from a stock, compared to its current price.
How to calculate dividend yield
You calculate dividend yield like this:
Dividend yield = annual dividend ÷ share price × 100
So, if a company pays £4 a year in dividends and its share price is £100, the dividend yield is 4%.
A higher yield can look attractive – but it’s not the full story. Sometimes a high yield means the share price has dropped (which might be a red flag), or that the dividend might not be sustainable. It’s always worth checking the bigger picture.
Investing glossary
It's important you know
Capital at risk. All investing should be for the longer term. The value of your investments can go up and down, and you may get back less than you invest. Tax treatment depends on individual circumstances and may be subject to change in the future.
A 25% government penalty applies if you withdraw money from a Lifetime ISA for any reason other than buying your first home (up to £450,000) or for retirement, and you may get back less than you paid into your Lifetime ISA.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Payments you make into your pension won’t be accessible until the minimum pension age (currently 55, increasing to age 57 from 2028). Tax treatment depends on individual circumstances and may be subject to change in the future.