What is the Indicated Yield?
How Does the Indicated Yield Work?
The formula for indicated yield is:
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 Does the Indicated Yield Matter?
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.
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