What is the yield of a stock?The dividend yield is the annual percentage of dividend return on the current value of the stock.
Tip : a newbie investor may be tempted to choose stocks solely on their current performance.
This may not be a good idea for the following reasons:
- a stock can have a significant return because its price may have recently fallen sharply (loss of investor confidence),
- the fact that a company pays a large dividend is not necessarily a guarantee of long-term solidity.