Definition
Formula for Dividend Yield (%) calculation:
Dividend Yield = Most Recent Full Year Dividend/Current Share Price
Explanation
Over the long term, the return from dividends has been a significant contributor to the total returns produced by equity securities. Studies by Elroy Dimson, Paul Marsh, and Mike Staunton of Princeton
University (2002) found that a market-oriented portfolio, which included reinvested dividends, would have generated nearly 85 times the wealth generated by the same portfolio relying solely on capital gains.
Dividends may also qualify a lower tax rate for investors.
In dividends investing, Payout Ratio and Dividend Growth Rate are the two most important variables for consideration. A lower payout ratio may indicate that the company has more room to increase its dividends.
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Related Terms
Dividend Payout Ratio,
Dividend Growth Rate* All numbers are in millions except for per share dataGoodyear Tire & Rubber Co Annual Data
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Goodyear Tire & Rubber Co Quarterly Data
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