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.
It is therefore necessary to include parameters other than the return on a share when choosing a long-term investment.

Top