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Stocks Yield Definition

Investing in companies that offer dividends can be a safe move. Dividends are popular among income investors and retirees, because dividends can generate extra capital. Investors should look for companies that raise yields year after year.

  1. Yield

    • A stock's yield is its dividend expressed as a percentage. You can calculate the yield by dividing the dividend by the price of the share. Yields are applied to the market price at which the shares were bought, not to the current market value.

    Dividend

    • Dividends are payouts offered to shareholders from company earnings. You can calculate the annual dividend by multiplying the yield by the share price.

    Blue-Chip Stock

    • Blue-chip stocks are large, established corporations. These companies have a historical record of paying out dividends regardless of the economic condition.

    Dividend ETFs

    • Dividend ETFs are exchange-traded funds that invest in companies that offer above-average yields. The companies are often blue-chip stocks.

    Benefits

    • High-yield stocks offer dividend protection against a turbulent market. Dividends can offset a loss in value for underlying securities.

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