Ask a Fool: What Is Dividend Yield?

Worldwide Invest Better Day 9/25/2012

In the spirit of better investing and in celebration of the first Worldwide Invest Better Day coming up on Sept. 25, Motley Fool analysts will be answering user- and reader-submitted questions leading up to the big event. "Ask a Fool" anything, and we'll do our best to help you invest better.

Dividend yield is the annual dividend payout of a company divided by the current share price. It's expressed as a percentage. The S&P 500's (SNPINDEX: ^GSPC  ) average dividend yield is currently around 2.5%. In the following video, Fool.com analyst Isaac Pino goes over everything investors need to know when it comes to calculating and interpreting a company's dividend yield.

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Isaac Pino has no positions in the stocks mentioned above. The Motley Fool owns shares of IBM. Motley Fool newsletter services recommend Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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