Indicated Yield

Written By:
Paul Tracy
Updated August 12, 2020

What is the Indicated Yield?

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

How Does the Indicated Yield Work?

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 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.