Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Indicated Yield

What it is:

Indicated yield is the dividend yield on a stock if the most recent dividend is annualized.

How it works (Example):

The formula for indicated yield is:

 Indicated Yield = (Most Recent Dividend x Number of Dividend Payments Per Year) / Stock Price

For example, assume a stock's most recent quarterly dividend was $2 and the stock currently trades at $100. The indicated yield is: ($2 x 4) / $100 = 8%.

Why it Matters:

The indicated yield is a way to forecast a stock's annual dividend yield. It is important to keep in mind that the indicated yield is only part of the equation when evaluating possible returns from a stock investment. The other part of the equation is potential stock appreciation or decline. Indicated yield is only a partial measure of return.