Dividend yield tells investors what percentage return they are getting from dividends alone, relative to the stock's current price.
Formula: Dividend Yield = (Annual Dividend Per Share / Current Market Price) x 100%.
What counts as a good dividend yield depends on the industry and market conditions. Generally, yields between 2% and 6% are considered healthy.
However, extremely high dividend yields are not always good — they can sometimes result from a falling stock price.
In Bangladesh's stock market, banking and telecom companies typically offer good dividend yields.
Dividend yield is especially important for income-focused investors who invest in stocks for regular income.