Performance & Return
Dividend Yield
Definition
The annual income generated by the portfolio's dividend-paying holdings expressed as a percentage of portfolio value.
Dividend yield is an income metric that relates annualized distributions to a price reference, making it useful for income expectations but incomplete as a total-outcome metric.
Why it matters
It tells you what the portfolio produces in income relative to its size. It is a key metric for income-focused investors.
What most investors miss
The gap between what the term means and how it is usually applied.
They calculate yield per holding not per portfolio. The portfolio yield depends on the weight of each income-producing position in the full picture.
How to read it
Read yield at the portfolio level not the holding level. A high-yield stock that is 2% of the portfolio has minimal impact on overall income.
Multi-account lens
How this term reads differently across brokers and accounts.
Dividend income spread across multiple accounts is easy to undercount. Each broker reports its own dividends. The total requires explicit consolidation.
Related terms
Terms that connect to dividend yield.
Yield on Cost
The dividend income received expressed as a percentage of the original purchase price rather than the current market value.
Income Yield
The total income produced by the portfolio expressed as a percentage of portfolio value including dividends interest and distributions.
Dividend Income
The cash or reinvested shares received from holdings that pay regular distributions.
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