What Is Dividend Yield With Capital Growth?

The investment attributes of dividend yield with capital growth refers to those stocks that not only pay current dividends to shareholders but also offer the prospect of capital appreciation over the long term.

Dividend Yield

Dividend yield is a percentage measure of the annual rate of return to shareholders based on the amount of dividends paid on a yearly basis. Dividend yield is determined by dividing the total amount of dividends paid on a stock by its current market price.

Dividend Yields May Vary

If the dividend rate on a stock remains fixed, but its market price declines, the dividend yield will rise. If the market price rises, the current dividend yield will decline.

Payment Of Dividends

Dividends on common stock are declared by a corporation's board of directors and are usually paid to shareholders on a quarterly basis.

Capital Growth

The price of the common stock of a company that pays dividends may also rise or appreciate due to its earnings growth based on favorable developments in its underlying business.

Total Rate Of Return

The total rate of return for an investor who owns stock that pays dividends and whose price appreciates over time would be equal to the amount of dividends received since purchase plus the rise in the stock price.

References

• Dividend Yield
• Capital Appreciation