← Glossary · Financial ratios
Dividend yield
The annual dividend as a percentage of the current price.
Dividend yield shows what percentage of the price is paid out each year as dividends. A share at 50 € paying a 2 € dividend yields 4 %.
A very high yield is not automatically good. It often arises because the price has fallen sharply, and sometimes the dividend is cut afterwards. The payout ratio helps put it in context.