What is Dividend Yield?
The dividend yield shows how much a company pays out in dividends each year relative to its stock price. The dividend yield is an estimate of the dividend-only return of a stock investment.
For example, if a company's dividend yield is 7% and you own $10,000 of its stock, you would see an annual payout of $700 or quarterly installments of $175.
Assuming the dividend is not raised or lowered, the yield will rise when the price of the stock falls. And conversely, it will fall when the price of the stock rises.
Why is Dividend Yield important?
1. The primary reason to understand dividend yield is to help you understand which stocks offer you the highest return on your dividend investing dollar.
2. Dividend yields make it easy to compare stocks
3. Increasing dividend yields indicates financial health
Disadvantages of Dividend Yield
An unexpectedly high yield could actually be a red flag. This might happen for a couple of reasons:
1. The company's stock price has recently plummeted.The company's stock price has recently plummeted
2. The company is attempting to woo investors with a high dividend payment. But this dividend payout—and increased stock value—may not last if the company isn't financially stable and can't afford to maintain the higher dividend payments.
5 best dividend stocks with high yields
1. Guggenheim Strategic Opportunities Fund(GOF.US)
2. Cherry Hill Mortgage Investment Corp(CHMI.US)
3. Clough Global Dividend and Income Fund(GLV.US)
4. Sculptor Capital Management(SCU.US)
5. FS KKR Capital(FSK.US)
If you want to know more about high dividend yields stock, please click: Some high dividend yields US stock
How to find it on Moomoo?
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What do you need to know about dividends?
Source: Investopedia, Forbes, Moomoo news