How is dividend yield calculated?
Annual dividends per share divided by the current share price, times 100. A stock at $62.50 paying $0.55 quarterly pays $2.20/year, a yield of 3.52%. Enter the per-payment amount and frequency here and the annualization is handled for you.
What is yield on cost?
Annual dividends divided by what YOU paid per share, rather than today's price. If you bought at $48 and the stock now pays $2.20/year, your yield on cost is 4.58% even though new buyers get 3.52%. It rewards long holding of dividend growers — though decisions about buying more should use current yield.
Is a higher dividend yield always better?
No — unusually high yields (above roughly 8%) are often a warning sign. Yield rises mechanically when a share price falls, so a "10% yielder" may be a company in trouble whose dividend is about to be cut. Check the payout ratio and dividend history; sustainable and growing usually beats high and fragile.
How often are dividends paid?
US companies typically pay quarterly; many European companies pay annually or semi-annually; some REITs and income funds pay monthly. You must own shares before the ex-dividend date to receive a given payment. This calculator converts any payment frequency into annual and monthly income figures.
Why has the yield changed when the dividend has not?
Because yield is the dividend measured against today's price, so it moves whenever the price does. A share paying a steady annual dividend shows a rising yield as the price falls and a falling yield as the price rises. This is why an unusually high yield is so often a warning rather than an opportunity: it frequently means the market has marked the price down because it doubts the payout will continue. Always check whether the numerator or the denominator moved before treating a high yield as good news.
Can I buy just before the ex-dividend date to collect the payment?
You will receive the dividend, but you are unlikely to gain from it. On the ex-dividend date the share price typically opens lower by roughly the amount of the dividend, because the company is about to pay that cash out and is worth correspondingly less. You end up holding a slightly cheaper share plus the cash, which is close to where you started — and in a taxable account you may have created a tax liability for the privilege. The strategy is known as dividend capture and rarely survives costs and tax.