Dow Jones Industrial Average (DJIA) Yield


DEFINITION of 'Dow Jones Industrial Average (DJIA) Yield'

The aggregate dividend yield on the 30 stocks that make up the Dow Jones Industrial Average. The DJIA yield is calculated by adding the dividends of all 30 component stocks, dividing the result by the price-weighted DJIA index value and factoring in the Dow multiplier. Generally, the DJIA yield is used as a trading indicator by investors, as yields below 3\% are considered a selling signal and yields above 6\% are considered a buying signal.


Loading the player...

BREAKING DOWN 'Dow Jones Industrial Average (DJIA) Yield'

The trading indicator function of the DJIA yield has not held form in the most recent bull market period, as the DJIA Yield has remained below 3% since the early 1990s.

The gradual downtrend in yields found in the DJIA tends to reflect the change in company mix. The DJIA is no longer a purely industrial index; today's DJIA contains healthcare, technology and financial companies, which traditionally pay lower dividend rates than mature, industrial-based stocks.

  1. Dividend

    A distribution of a portion of a company's earnings, decided ...
  2. Dogs Of The Dow

    An investing strategy that consists of buying the 10 DJIA stocks ...
  3. Dow Jones Industrial Average - ...

    The Dow Jones Industrial Average is a price-weighted average ...
  4. Price-Weighted Index

    A stock index in which each stock influences the index in proportion ...
  5. Yield

    The income return on an investment. This refers to the interest ...
  6. Dow Jones Transportation Average ...

    A price-weighted average of 20 transportation stocks traded in ...
Related Articles
  1. Bonds & Fixed Income

    How Now, Dow? What Moves The DJIA?

    Find out how this index tracks market movements and where it falls short.
  2. Investing Basics

    Barking Up The Dogs Of The Dow Tree

    One well-known and successful strategy for cashing in on dividends is the Dogs of the Dow. Here's what you need to know about them.
  3. Investing Basics

    How To Create A Modern Fixed-Income Portfolio

    Exposure to different asset classes is required to generate income, reduce risk and beat inflation. Find out how bonds can help.
  4. Investing

    The Dow Jones Industrial Average

    Learn how this price-weighted index performs and the ways to interpret its movements.
  5. Options & Futures

    Why The Dow Matters

    Although the DJIA only includes 30 stocks, it can tell you a lot about the market as a whole.
  6. Investing

    In Search of the Rate-Proof Portfolio

    After October’s better-than-expected employment report, a December Federal Reserve (Fed) liftoff is looking more likely than it was earlier this fall.
  7. Investing

    What a Family Tradition Taught Me About Investing

    We share some lessons from friends and family on saving money and planning for retirement.
  8. Investing

    Where the Price is Right for Dividends

    There are two broad schools of thought for equity income investing: The first pays the highest dividend yields and the second focuses on healthy yields.
  9. Investing

    3 Cheap Dividend Growth Stocks for Your Portfolio

    Top dividend growth stocks to add to your portfolio.
  10. Investing

    The Pros and Cons of High-Yield Bonds

    Junk bonds are more volatile than investment-grade bonds but may provide significant advantages when analyzed in-depth.
  1. Which mutual funds made money in 2008?

    Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
  2. What are the dividend reinvestment options for a mutual fund?

    There are two primary choices for how investors can choose to handle dividend distributions made by mutual funds that they ... Read Full Answer >>
  3. Do mutual funds pay dividends or interest?

    Depending on the type of investments included in the portfolio, mutual funds may pay dividends, interest, or both. Types ... Read Full Answer >>
  4. Should I sell my shares if a company suspends its dividend?

    Since 2008, when the Federal Reserve slashed interest rates to zero and then kept them there indefinitely, dividend-paying ... Read Full Answer >>
  5. Do hedge funds pay dividends?

    Hedge funds rarely pay dividends to the accredited investors who invest directly in them. Instead, these investors share ... Read Full Answer >>
  6. Which mutual funds pay the highest dividends?

    For many people, the reliability of dividend or interest income is one of the primary benefits of investing. Like individuals ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  2. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  5. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  6. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
Trading Center