Dividend Yield

The yield turns a dividend into something comparable. A payment of $3 a year means one thing on a $100 share and something quite different on a $300 one, and the percentage is what makes those two cases legible side by side.

The important mechanical point is that the price is in the denominator. If the dividend never changes and the share price halves, the yield doubles, purely because the price fell. A yield that has climbed sharply is therefore worth tracing back to which of the two numbers moved, because the answer is often the price.

Yields are quoted as backward-looking, based on what has already been paid, or forward-looking, based on what the company has indicated it will pay. The two can differ, and a page showing one should say which.