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Where can I find the current yield of a stock?
Let's begin with a discussion and definition of what the yield of a stock actually is.Now, there are two kinds of yield of a stock.The first, and the one that is most discussed and most frequently used, is the dividend yield.The second is the expected capital growth yield of a stock.When you compare the two yields, then you come up with what is called the total yield of a stock.
Let's start with the dividend yield of a stock.To find the dividend yield of a stock, you look first at the current price of a share of the particular stock that you are investigating.This is not the price that you paid for the stock, but the amount that each share is selling for on the market today.Then you examine the current dividend payout of the company.So, let's look at an example.Let's imagine that you are investigating investing in a company called Megabusiness Corp.The current selling price of each share of stock is $45. The annual dividend payout is $4.15.Divide the annual dividend payout by the current selling price of a share to find the dividend yield.4.15 / 45 is 0.092, so the dividend yield of this stock is 9.2%.You can find the share price and the dividend payout in the newspaper.But you can also find the dividend yield listed there too, so you don't actually have to do any math yourself. Current yield of a stock is not the only thing that you want to know, however.It is important to know the past yields of a stock so that you can know if the company is improving, or if it is declining.You might think that you have a good yield on a stock, but if you happen to do just a little research, you might discover that your good yield is the lowest yield that this stock has had in the last 25 years, and the last two decades have been nothing but steady decline.That does not quite sound like the sort of investing situation that you necessarily want to get involved in.You can find historical yield information through Standard and Poor, Value Line, or on the stock web pages online. For example, the dividend yield might be low, but then if you look at the expected capital gain yield and what the company is actually doing, you could get a different picture.It might be that the company is, instead of using extra funds by paying them out to stockholders in the form of dividends, rather reinvesting the money back into the company.The company could be investing in new research projects, new product development, purchases of other corporations, purchase of new property for expansion, or something along those lines.These projects will hopefully increase the value of the company.This means that the value of the stock will rise, and if you have purchased the stock at a lower price, the rise in value will be great for you.If you are interested in cash or stock dividends, then the rise in value could also, hopefully, result in a rise or increase in the amount of the dividend payout.
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