How to Determine a Stock's Yield

Yield is the earnings received on shares of stocks an investor owns, and it's represented as a percentage, such as 6 percent per year. Determining a stock's current yield can help an investor decider whether to sell a stock and compare a stock's potential returns with other investment options.

Difficulty: Moderately Easy

Instructions

1. Figure out a stock's current yield yourself by taking that stock's current market price per share and dividing it by the current annual dividend per share, or the earnings paid out in cash. Yield calculators also are available online.

2. Consider that it's a change in a stock's dividend that produces a change in its yield. Additionally, since the price of a stock changes on a regular basis, expect the listed yield to change as well.

3. Be aware that when stocks are bought for the purpose of generating needed income, it's important to keep track of the yield for those stocks in an attempt to produce the most income.

Tips & Warnings

• Since the yield indicates the return an investor can expect by purchasing a dividend-paying stock, it allows for a comparison of those potential returns with other investments such as bonds.
• Tracking a stock's yield also can help an investor determine whether money should be kept in that stock or shifted to a higher-yielding investment.

Resources

• Find information on stocks and yield.