Dividend Yield Calculator
Evaluate dividend-paying stocks by calculating the dividend yield, your annual income, and the company's payout ratio. Essential for income investors building a dividend portfolio.
Dividend yield is the ratio of a company's annual dividend to its current stock price, expressed as a percentage. It tells you how much income you receive relative to the price you pay for the stock. A stock priced at $50 paying $2 in annual dividends has a 4% yield.
The payout ratio shows what percentage of earnings the company distributes as dividends. A payout ratio below 60% is generally sustainable, suggesting the company retains enough earnings for growth and has a buffer to maintain dividends during downturns. Ratios above 80% may indicate the dividend is at risk of being cut.
Dividend yield is a key metric for income investors, but it should not be evaluated in isolation. A very high yield (above 6-7%) can be a warning sign that the market expects a dividend cut or the stock price has fallen due to fundamental problems. The best dividend stocks combine a moderate yield with consistent dividend growth.