What it is
Annual dividends per share / share price. A 4% dividend yield = $4 of annual income per $100 invested.What "good" looks like
- 5%+: high - usually signals either a deeply undervalued business OR a stretched payout ratio that may not be sustainable
- 2–5%: typical for mature, capital-returning businesses
- 0.5–2%: signals the business is reinvesting most of its cash flow
- 0%: growth-mode (no dividend) - common for tech and early-stage companies