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A high dividend yield isn't always a bargain — sometimes it's a warning. If the share price falls, the yield rises automatically even if the payout stays the same, so always check the payout ratio too. I break down yield vs. payout ratio in my new guide: https://zimbuck.com/blogs/1733/What-Is-a-Dividend-How-Dividend-Stocks-Work-Yield-Payout — what do you check first, yield or payout ratio?
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What Is a Dividend? How Dividend Stocks Work — Yield, Payout...
A dividend is a cash payment a company sends to its shareholders out of its profits — if a stock trades at $50 and pays $2 a year, its dividend yield is 4.0%. Dividends are the income leg of owning shares, separate from any rise or fall in the price, and learning how they work is essential...
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