Dividend yield
Annual dividends per share divided by the current share price, expressed as a percentage.
Definition and exampleEDRAVO LEARN · FREE GUIDES
Make sense of investing.
Plain-English definitions and practical examples for reading UK company news.
THE A–Z OF INVESTING
A word you don’t know? Start here.
137 terms. Plain-English definitions, examples and related topics.
START HERE
Why a higher dividend yield is not always good news
A simple example of how the percentage can rise without the dividend increasing.
Read the guide10p ÷ 200p5%
10p ÷ 100p10%
Same annual dividend. Lower share price.
Try the numbers yourself
Change the inputs in our free calculators to explore the arithmetic behind an announcement.
In-depth guides
10 guidesRNS announcements
RNS stands for Regulatory News Service, a London Stock Exchange service used to distribute company announcements and other financial communications.
Definition and exampleMarket capitalisation
Market capitalisation is the current share price multiplied by the number of shares outstanding. It measures the market value of a company's equity.
Definition and exampleP/E ratio
The price-to-earnings ratio compares a share's price with annual earnings per share. Both figures must use the same currency units.
Definition and exampleProfit and cash flow
Profit reflects income and expenses recognised for a period. Cash flow records cash moving into and out of the business. They measure different things.
Definition and exampleShare dilution
Ownership dilution happens when your shares represent a smaller percentage of a company after additional shares are issued.
Definition and exampleTrading updates
A trading update is a company announcement about recent business performance and often its outlook. It is usually shorter than a full results announcement and may not include complete financial statements.
Definition and exampleProfit warnings and guidance
A profit warning is an announcement that a company expects profit to be materially below its previous guidance or market expectations. Guidance is management’s estimate of future performance; market expectations usually refer to analysts’ forecasts.
Definition and examplePlacings and rights issues
Companies can raise money by issuing new shares. A placing allocates shares to selected investors. A rights issue offers qualifying existing shareholders new shares in proportion to their existing holding, at a set price and within a stated timetable.
Definition and exampleCompany debt and borrowing
Company debt is money a business has borrowed and must repay under agreed terms. Assessing it means checking cash, interest costs, repayment dates and the conditions attached to the borrowing.
Definition and example