Dividend Yield and Payout Ratio
A 1-minute lesson from the MarketPro academy, one of 24 in fundamental analysis.
Dividend yield and payout ratio are two figures commonly used to evaluate how a company returns cash to shareholders, and together they help assess whether a dividend looks sustainable. Dividend yield divides the annual dividend per share by the current share price, expressing the payout as a percentage return relative to the stock's price.
Dividend yield and payout ratio are two figures commonly used to evaluate how a company returns cash to shareholders, and together they help assess whether a dividend looks sustainable.
Dividend yield divides the annual dividend per share by the current share price, expressing the payout as a percentage return relative to the stock's price. A falling share price can mechanically push yield higher even if the dividend itself hasn't changed, so a high yield is not automatically a sign of good value — it can also reflect a market pricing in risk to future earnings or the dividend itself.
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Lesson 13 of 24 in Fundamental analysis
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