Dividend yield

Capital returns

Cash dividends paid over the latest fiscal year as a percentage of the current market cap.

Formula

Dividend yield = dividends paid (latest fiscal year) ÷ market cap

Why it matters

Dividends are the oldest and most direct form of shareholder return: cash leaves the company and arrives in your account, with no judgment required about reinvestment. A long record of maintained or growing dividends also carries information — managements cut dividends only reluctantly, so a steady payout signals confidence in recurring cash flow. For slow-growing businesses, the dividend is often most of the total return.

What good looks like

2–4% with a well-covered payout is the healthy range for mature payers. Above 5–6% often signals that the market doubts the dividend's sustainability — check the FCF payout ratio before treating a high yield as a gift. Near zero simply means the company prefers buybacks or reinvestment, which can be equally valid.

Caveats

We compute yield from cash actually paid in the last fiscal year, not the announced forward rate, so recent dividend changes are not yet reflected. A yield can look attractive purely because the price collapsed — the yield is high because the market expects a cut. Dividends are taxed on receipt in taxable accounts, making buybacks more tax-efficient for many holders.