Finance & Money · 股息率（Dividend Yield） · Updated 2026-10-25
What Is Dividend Yield?
Definition
Yield = trailing 12-month dividend per share ÷ current price, putting stocks and deposits on the same yield basis (a 5% bank-stock yield vs 2% deposits). But both numerator and denominator move: dividends are board decisions (cuttable) and price is volatile — a 50% price collapse turns "5% yield" into 10%; that is the market pricing risk, not a windfall. Judge stability by dividend continuity (10+ years) and payout ratio (dividends/net profit above 100% is unsustainable).
Formula
Dividend Yield = Annual DPS / Current Price
Worked Example
At 10 yuan with 0.5 dividend the yield is 5%; if earnings deteriorate and the price halves to 5 with the dividend unchanged, the yield shows 10% — but the market has priced a cut, and after dividends halve the yield is back to 5%.
Common Misconception
Buying on high yield without asking why — it can presage a price collapse (value trap). And mind ex-dividend mechanics: price drops by the dividend on the ex-date, cash dividends are taxed (20% under 1 year of holding, 0% over), so short-term dividend harvesting is negative-sum after tax.
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