What Is Dividend Yield, What Counts as High, and Is High Always Good?
Dividends over the past year divided by the current price. A falling share price also inflates the yield, so check whether the payout is sustainable.
Dividend yield is the cash a company paid out per share over the past year as a percentage of its current share price — what you would collect in dividends over a year if you bought at today's price. It compares the payout with the price; it is not the payout itself.
How it is calculated
In words: dividends per share over the last 12 months, divided by the current price, times 100. A stock at 50 that paid 2 in dividends over the year yields 4%. The numerator is normally the declared or paid historical dividend, so the figure looks backward and promises nothing about the future.
The denominator is today's price, which has an important consequence: if the price halves, the yield doubles. A suddenly high yield can mean the dividend was raised or simply that the shares fell hard — two very different stories.
Rules of thumb
| Dividend yield | What it usually means |
|---|---|
| 0% | No dividend; typical of growth-stage or lossmaking companies |
| 0% to 2% | Token payout; most profit is retained for reinvestment |
| 2% to 4% | Common for mature companies |
| 4% to 7% | High yield; utilities, banks and property trusts often sit here |
| Above 7% | Rule out a collapsed share price or a one-off special dividend first |
These bands are conventions. Banks, energy and telecom names in HK and mainland China tend to yield more; most US technology stocks yield close to zero. Comparing the yield with the prevailing risk-free rate is more informative than the raw number.
What it does not tell you
- Whether the dividend is sustainable. A payout ratio above 100% (paying more than earnings) or dividends funded by borrowing rarely last.
- Total return. A 10% fall in the share price wipes out several years of a 4% yield.
- Your after-tax income. Withholding tax on HK and US dividends varies widely with where you live.
In Stock Compass
On the card's fundamentals row, "Div" shows as a one-decimal percentage. It appears only when the yield is above zero; non-paying companies show nothing for this item.
In the verdict's valuation dimension, a yield of 4% or more adds one positive note ("Dividend yield of N% is above most stocks"); below 4% nothing is added. It does not feed the business-quality dimension, because how much a company pays out is a capital-allocation choice and says little on its own about how well the business runs.
Strategy rules offer two indicators for the same idea; pick one: dividend_yield_pct (from the fundamentals cache, the same source as the card, e.g. dividend_yield_pct > 3) and dividend_yield (from the quote feed, e.g. dividend_yield > 3). The two sources can differ slightly. Whether a high-yield filter actually helps in your own universe is something you can test — see backtest your own strategy.
FAQ
Is a 10% yield a bargain?
Check what happened to the numerator and the denominator first. Double-digit yields usually come from a collapsed share price or a one-off special dividend, and the market is often already doubting the next payment. Read it with the payout ratio and net margin.
Why is the dividend field blank for some stocks?
The card shows the item only when the yield is above zero. Companies that pay nothing, and HK or A-share listings whose fundamentals are missing, show no dividend figure.
How is dividend yield different from payout ratio?
Yield is dividend divided by price and measures what you receive at today's price. Payout ratio is dividend divided by net profit and measures how much of its earnings the company hands out. Sustainability is judged by the second.
Definition only — not investment advice.