Definition
Dividend yield shows the relationship between the dividend you receive and the price you paid for the stock. It is the key metric you use to compare dividend stocks.
Formula: Dividend yield = (Dividend per share divided by Share price) × 100
Example: Stock at 200 NOK · Dividend 10 NOK · Dividend yield = 5%
Assessment
Below 2% — low · 2-4% — normal · 4-6% — good · Above 7% — may be a warning sign
Warning: A very high dividend yield can mean the price has fallen sharply due to company problems — not that the dividend is safe.
"Income without work is the investor dream. Dividend yield is a step toward that dream."— Florence Scovel Shinn