Yield
Yield is the income you receive from an investment compared to its price, usually expressed as a percentage.
Quick reference:
Formia: Dividend ÷ share price * 100. High yield: more income, but may carry risk.
Low yield: less income, often safer companies.
Expanded explanation:
On the ASX, yield usually refers to dividend yield. It tells investors how much income they earn from dividends compared to the price of the share. For example, if a share costs $20 and pays a $1 dividend each year, the yield is 5%.
Yield is useful for comparing income opportunities, but a high yield isn’t always better. Sometimes yields rise because the share price has fallen, which may be a sign of problems in the business. Yield should considered alongside company health and dividend reliability.
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