Term · Valuation
Dividend Yield
In briefThe dividend yield relates the distributed dividend to the share price. For small caps, dividends are often less stable, so the yield should be assessed in particular against cash flow, balance-sheet quality, and payout policy.
Definition
The dividend yield measures the distributed dividend relative to the share price.
How it is calculated
Formula. Dividend yield = dividend per share / share price.
Why it matters for small caps
In the small-cap segment, dividends are often less stable; the yield should therefore be scrutinized in particular against cash flow, balance-sheet quality, and payout policy.
Common misreadings
- A high dividend yield is often misread as a safety signal, even though it can also result from a sharply fallen share price.
In the process
Frequently asked
What is the dividend yield?
It shows how much dividend an investor receives per euro invested. It is expressed as a percentage of the price.
How is the dividend yield calculated?
You divide the dividend per share by the share price. The result is the current payout yield.
Why is a high dividend yield not automatically safe?
It can also result from a sharply fallen price. A high figure is then more of a warning signal than a safety signal.
Related terms
Sources
Primary
Bundesministerium der Justiz – Aktiengesetz (AktG)
https://www.gesetze-im-internet.de/aktg/
https://www.gesetze-im-internet.de/aktg/
Methodology
EUR-Lex – EU-Prospektverordnung, Verordnung (EU) 2017/1129
https://eur-lex.europa.eu/eli/reg/2017/1129/oj
https://eur-lex.europa.eu/eli/reg/2017/1129/oj
Education only, not investment advice. Ranges and thresholds are didactic orientation values, not an official standard.