One may have seen headlines like this:
“ABC’s yield is now X%! Is it time to buy?”.
Granted most titled content like this will provide explanations and/or judgments at first glance, if X% is high or in the double digits, I’d be interested too. However, let us remind ourselves of the specific formula for dividend yield, and that is:
Dividend yield = Dividend amount of last 12 months / Current price
Image produced by Gemini.
Before I hit the “buy” button, I will be interested in ABC itself, and that means I will need to do some fundamental analysis on the company. Some financial figures I would look at are:
dividend growth rate
It is difficult to increase yield over time because the percentage may increase as both the dividend amount and price decline simultaneously.
…
