How to Calculate Dividend Yield
Comparing stock prices is only one part of the investment process. Compare and calculate dividend yields to choose the best stocks.
Instructions
- Step 1: Use the percentage answer, or dividend yield, to compare and purchase stocks with confidence.
- FACT: In 2010, Frontier Communications Corporation stock had the highest dividend yield on the S & P 500 index -- around $7.99 with shares costing around $9 each.
- Step 2: Multiply the decimal answer by 100 to get a percentage that represents the dividend yield of the stock at its current price.
- Step 3: Divide the recent full-year dividend by the current stock price on a calculator. The answer will be a decimal number.
- TIP: Dividends are sometimes quoted as "forward annual dividend rates" and are given as a decimal number on many finance websites.
- Step 4: Determine the current stock price, or closing value, using a stock exchange or financial website.
- Step 5: Find the most recent full-year dividend information for a stock. This information can be found on many finance websites or through your stock trader.
