Dividend yield and dividend policy: how to calculate and read them

Dividend yield is the cash dividend per share relative to the share price; dividend policy decides how much a company pays each year.

Updated：2026-11-08

Types of dividends

• Cash dividend: paid directly in cash; on the ex-dividend date the reference price is adjusted by the dividend.
• Stock dividend: shares distributed by converting earnings into capital; on the ex-rights date the number of shares increases and the reference price is adjusted accordingly.

For how both are adjusted, see “What is ex-dividend, and what adjusted prices mean”.

Dividend yield

Dividend yield = cash dividend per share ÷ share price × 100 (%).

• The “cash dividend yield” ranking on this site uses the cash dividend of the most recent full year divided by that day’s closing price.
• An ETF’s distribution rate is the total distribution per unit over the last 12 months divided by the closing price (including amounts announced but not yet gone ex-dividend). The two are calculated differently and cannot be compared directly.
• Dividend yield changes with the share price every day: when the price falls, the same dividend produces a higher yield.

How to read it

• Dividend yield only describes what percentage the past dividend equals at the current share price; it does not guarantee that the same dividend will be paid again. How much a company pays each year depends on that year’s earnings, its cash position and its dividend policy.
• Looking at the stability of dividends (whether they have been paid consecutively over the years) and the payout ratio (dividend ÷ EPS) is more complete than looking at yield alone; when the payout ratio is too high, the dividend may be hard to maintain.
• One-off profits (for example from selling assets) may make a particular year’s dividend unusually high, so compare it with past years.

Where to see it on this site

The “Dividend yield” ranking in the Market section, the dividend and ex-dividend history in the Basic tab of a stock page, the ex-dividend dates in the Calendar, and the dividend yield condition in the “Valuation” category on the Screener page.

This article only explains terms and how to calculate them. It is not investment advice.