Dividend yield is the annual dividend divided by the share price. Enter price, dividend per share and how many shares you own to see the yield and your yearly income.
Payment frequency matters for cash flow but not yield — quarterly payers distribute the same annual amount in four instalments.
A very high yield is often a warning: the market may be pricing in a dividend cut. Check payout ratios before chasing yield. For long-term income projections, the Dividend Income Planner compounds growth and reinvestment.
Yield moves inversely with price, which is why a rising yield is ambiguous. The same €4 dividend on a share falling from €100 to €60 lifts the yield from 4% to 6.7% without the company paying a cent more. Screening for high yield frequently screens for falling share prices.
The payout ratio is the sanity check: the share of earnings — or better, of free cash flow — being distributed. A ratio comfortably under two-thirds leaves room for a bad year; one above 100% means the dividend is being funded from reserves or borrowing, which is not a thing that continues indefinitely.
Buybacks complicate comparisons across markets. A company returning cash by repurchasing shares shows no yield at all while delivering the same economic return, which is part of why US market yields look low against European ones. Total shareholder yield — dividends plus net buybacks — is the like-for-like figure.
Frequently asked questions
How is dividend yield calculated?
Annual dividend per share divided by the share price. €4 of yearly dividends on a €100 share is a 4% yield.
What is yield on cost?
The current annual dividend divided by what you originally paid. Rising payouts push it above the market yield the longer you hold — a favourite metric of income investors.
Is a very high dividend yield good?
Treat it with suspicion: yields far above the market often signal a falling price and an expected dividend cut. Check the payout ratio and earnings trend before chasing it.