How Do You Calculate A Dividend Yield?
Dividend yield is the relative percentage of cash a company distributes to its shareholders compared to its stock price. Assuming the amount of dividend paid is consistent throughout the year, multiply it by the number of dividends paid per year. Typically, publicly traded companies pay dividends four times per year (quarterly). If the dividend is not consistent, find the sum of dividends paid within one year. To calculate the current dividend yield, divide the annual dividend from Step 1 by the current stock price and multiply by 100. The product will be the current dividend yield expressed as a percentage. To calculate the dividend yield relative to the purchase price, divide the annual dividend from Step 1 by the average cost per share and multiply by 100. The result will be the dividend yield relative to the average cost per share expressed as a percentage.
