Dividend Yield
Dividend yield expresses annual dividends as a percentage of the share price.
The trailing dividend yield divides the dividends paid per share over the last twelve months by the current share price. It shows the cash income an investor would have received at today's price, before any dividend growth or cuts.
A very high yield can be a warning sign: if a share price falls sharply because the market expects the dividend to be cut, the trailing yield looks temporarily inflated. Yields are best read alongside the company's earnings cover and history of payments. Work out income from holdings with our payout calculators.
Example
A stock priced at £20 that paid £1 in dividends over the past year yields 5%.
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