Dividend Yield — What It Means for Investors

 

Dividend Yield Explained — Visual Guide for Investors

Dividend Yield  — What It Means for Investors

The dividend yield is a key indicator showing how much a company pays out in dividends each year relative to its current stock price.

It’s expressed as a percentage and calculated as:

Dividend Yield = (Annual Dividend per Share ÷ Current Share Price) × 100

🟢 Why It Matters

A higher dividend yield can mean a company is rewarding shareholders generously, which may attract income-focused investors.

However, an unusually high yield can also signal a declining stock price or potential financial trouble — so it’s important to check the company’s fundamentals.

🧩 Example

If a company pays ₩2,000 per share annually and its stock trades at ₩40,000,

then its dividend yield is 5% (2,000 ÷ 40,000 × 100).

💡 Investor Insight

Stable, mature firms (like utilities or telecoms) often have steady yields.

Growth companies usually reinvest profits instead of paying large dividends.

Comparing yields across sectors helps find balance between income and growth.

📚 Reference

Investing.com

Investopedia – Dividend Yield Definition

U.S. SEC – Investor Basics on Dividends