Glossary

The dividend yield is a financial ratio that shows the annual dividend income an investor would receive from a stock relative to its current market price. 📈

It's expressed as a percentage and calculated by dividing the annual dividend per share by the stock's current price per share. The dividend yield helps investors compare the income-generating potential of different dividend-paying stocks.

For example, if a stock has an annual dividend of $2 per share and is currently trading at $50 per share, its dividend yield would be 4% ($2 / $50).

Fun fact: Dividend yields can be a useful tool for income-seeking investors. 💼 However, a high dividend yield could be a warning sign, as it might indicate that the stock price has fallen significantly due to company troubles, making the dividend potentially unsustainable.