InsiderFlow › Glossary › What is dividend yield?

What is dividend yield?

Dividend yield is the annual dividend divided by the share price: the percentage "coupon" you collect by holding the stock.

A $100 stock paying $3 in annual dividends yields 3%. It's the favorite metric of income investors, but it must be read together with sustainability: a dividend the company can't afford will be cut.

Very high yields (above 7–8%) are often a warning sign: the market is pricing an imminent dividend cut or structural problems in the business.

Concrete example

If a stock falls from $100 to $50 while keeping a $4 dividend, the yield doubles from 4% to 8% — but that's not good news: it's the price that collapsed.

How you see it in InsiderFlow

On InsiderFlow these concepts come alive on real data: what big funds and insiders are buying, explained every day.

Frequently asked questions

What's a good dividend yield?

Between 2% and 5% with growing earnings is the classic quality zone; beyond that, cut risk rises.

Is the dividend yield guaranteed?

No: the board can cut or eliminate the dividend at any time.