What Does Yield Mean in Stocks?

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Stock yields can fluctuate and offer market opportunities at variable rates
Stock yields can fluctuate and offer market opportunities at variable rates (Image: stock market analysis screenshot image by .shock from Fotolia.com)

Stocks with a high dividend yield are given preference by traders and investors alike. Since stock yields tend to change over time, you should always do your research on a high stock yield company's financial trends.

Identification

Yield and dividends are variably interchangeable terms in the financial arena. According to the Rogue Investor website, stock yield is a regular dividend paid by a company divided by the price of the stock purchased. Mutual funds, annuities and other types of investments also have a yield value, but stock yields in particular deal with shares in a company.

Range of Stock Yields

The price range of a stock yield tends to fluctuate and allows you as the investor to make certain predictions. Higher stock yields are usually indicative of companies that are cash cows, paying out large dividends to its shareholders. Low stock yields could mean a company is operating out of the red and the stock might be overpriced.

Fluctuating Dividends

A company's board of directors is responsible for setting the price of stock yields. Shareholder dividends are usually distributed annually but sometimes decisions regarding stock prices are even made quarterly. Stock yields are therefore considered a fluctuating dividend in the public market.

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