This percentage is calculated by dividing total dividends by the stock price and multiplying by 100.
Origin
This information is received primarily from the company, but also can be taken from the Wall Street Journal. The current price is received from ComStock, a division of Interactive Data Corporation. This information is updated monthly.
Benefit
Dividend yield shows the percentage of its stock price a company pays out as dividends. High dividend yields are often indicative of value stocks or of companies that are distressed.
For the Pros
Stocks in Morningstar’s High Yield Stock Type have dividend yields that are at least twice that of the S&P 500. Investors who are interested in income may want to start by screening on High Yield Type stocks and then adding criteria, such as positive dividend growth or low debt levels, to sift out companies that may not be able to maintain their dividends.