1. What is Current Yield of Stock?

Definition: Current yield measures the annual income (dividends) a stock generates relative to its current market price.

Purpose: It helps investors evaluate the income-producing potential of dividend-paying stocks.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• Current Yield — Expressed as a decimal (multiply by 100 for percentage)
• Annual Dividend — Total yearly dividend payment per share
• Current Price — Market price of one share

Explanation: The formula shows what percentage of the stock's price is returned to investors as dividends annually.

3. Importance of Current Yield

Details: Current yield helps investors compare income potential across different stocks and assess whether a stock is fairly valued based on its dividend payments.

4. Using the Calculator

Tips: Enter the annual dividend per share and current stock price. The price must be greater than $0.

5. Frequently Asked Questions (FAQ)

Q1: How is this different from dividend yield?
A: They're essentially the same. Current yield is sometimes used for bonds while dividend yield is used for stocks, but the calculation is identical.

Q2: Should I prefer stocks with higher current yield?
A: Not necessarily. Very high yields may indicate financial trouble. Consider yield along with dividend sustainability and growth potential.

Q3: How often do I need to update this calculation?
A: Update whenever the stock price changes significantly or when the company changes its dividend.

Q4: What's a good current yield?
A: This depends on market conditions. Typically 2-6% is common for stable companies, but compare within the same industry.

Q5: Does this include special dividends?
A: Only if you include them in the annual dividend amount. Regular calculations typically use only recurring dividends.