The dividend yield is therefore an important measure to assess the attractiveness of a stock in terms of its distributions. It is calculated from the ratio of the annual dividend to the current share price and is given as a percentage. A high value often signals an attractive source of income for investors, but can also affect risks or a decliningindicate course development. It is therefore advisable to always consider the dividend yield in the context of further key figures and the company situation.
Importance of dividend yield for investors
For investors, the dividend yield plays a central role, especially in long-term asset planning. It not only allows an assessment of the current income from a stock investment, but can also be considered an indicator of the stability and reliability of a company. Investors who are dependent on regular income, such as pensioners orSecurity-oriented investors use the dividend yield to select suitable securities. At the same time, however, it should be noted that a high dividend yield does not necessarily guarantee a sustainable distribution, which is why a comprehensive analysis of the company’s figures and prospects is essential.
Relationship between dividend yield and stock market value
The dividend yield is calculated simply by dividing the annual dividend payment per share by the current share price. It should be noted that fluctuations in the share price can have a direct influence on the level of dividend yield, even if the dividend remains constant. the price increases significantly, the yield tends to fall whilefalling prices increases. This makes the dividend yield a dynamic value that should be reviewed regularly. In addition, the dividend yield can be used in combination with other key figures such as the price-earnings ratio (P/E ratio) or the payout ratio (payout ratio) to give a more comprehensive picture of the financial health and the distribution policy of ato get company.
