Dividend Yield

Income & Dividends
Updated Apr 2026 • Has calculator

Annual dividends per share expressed as a percentage of the stock price.

What is Dividend Yield?

Dividend yield measures the annual cash return an investor receives from dividends relative to the current stock price, expressed as a percentage. A higher yield can signal attractive income, but it can also reflect a falling stock price rather than rising dividends — a distinction known as a yield trap. Income investors compare dividend yield across stocks and against bonds to assess relative value, while growth investors often accept lower yields in exchange for capital appreciation potential.

Formula

Dividend Yield = (Annual Dividend Per Share ÷ Stock Price) × 100

Worked Example

Worked example — The Coca-Cola Company (KO)

FY2024

Step 1  Annual dividend per share: $1.94
Step 2  Stock price (Dec 31, 2024): $63.00
Step 3  Yield = $1.94 ÷ $63.00 × 100 = 3.08%
Step 4  → Every $1,000 invested in KO generated ~$30.80 in annual dividends

Source: Coca-Cola Company — Investor Relations (2025-02-14)

Calculate Dividend Yield

Total dividends paid per share over the last 12 months

Current market price per share

Dividend Yield

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Not investment advice.

How to Interpret Dividend Yield

< 1
Minimal — growth-oriented; little income
1 – 3
Modest — below-average income yield
3 – 5
Average — typical income stock range
> 5
High — verify sustainability of dividend

📚 Income Investing — Complete the path

  1. Dividend Yield
  2. FCF Yield
  3. Retention Ratio
  4. Sustainable Growth Rate
  5. PEG Ratio
Sources
  1. Coca-Cola Company — SEC Filings
  2. CFA Institute — Equity Valuation, 4th ed.
  3. Investopedia — Dividend Yield