Indicated Yield

AAA

DEFINITION of 'Indicated Yield'

The dividend yield that a share of stock would return based on its current indicated dividend. Indicated yield is calculated by dividing the most recent dividend multiplied by the number of dividend payments each year (the indicated dividend) by the current share price, and is usually quoted as a percentage:

IndicatedYield.jpg



Stock ABC's most recent quarterly dividend, for example, might be $4. If the stock is currently trading at $100, the indicated yield would be:

Indicated Yield of Stock ABC = $4 X 4 / $100 = 16%

INVESTOPEDIA EXPLAINS 'Indicated Yield'

A dividend is a distribution of a portion of a company's earnings, usually quoted in terms of the dollar amount each share receives (such as 25 cents per share). The indicated yield is often used as a forecasting technique to estimate a stock's annual dividend yield or the yearly earnings investors can expect for a particular stock. Many stock tables included in financial newspapers, such as the Wall Street Journal, include the indicated dividend of each stock to alert investors to the annual cash returns they might be able to expect. Because common stock dividends can change, instead of remain constant, (stockholders may receive larger dividends if earnings rise or smaller dividends if earnings drop, for example) the indicated yield is an estimate only.

RELATED TERMS
  1. Dividend

    A distribution of a portion of a company's earnings, decided ...
  2. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  3. Indicated Dividend

    The total dividends that would be paid on a share of stock throughout ...
  4. Yield

    The income return on an investment. This refers to the interest ...
  5. Earnings

    The amount of profit that a company produces during a specific ...
  6. Appraised Equity Capital

    The excess of the market value of an asset over its book value. ...
RELATED FAQS
  1. What's the difference between the coverage ratio and the levered free cash flow to ...

    Coverage ratios focus on a company’s ability to manage its debt, while the levered free cash flow to enterprise value ratio ... Read Full Answer >>
  2. How can I use market capitalization to evaluate a stock?

    Market capitalization represents the market value for an entire company. Investors can compare market cap to financial data ... Read Full Answer >>
  3. How do S&P 500 futures work?

    S&P 500 futures are a type of capital asset contract that provides a buyer the right to a predetermined selection of ... Read Full Answer >>
  4. What are the drawbacks of using the Dividend Discount Model (DDM) to value a stock?

    Drawbacks of using the dividend discount model (DDM) include the difficulty of accurate projections, the fact that it does ... Read Full Answer >>
  5. How does debt-to-capital change when a company issues new shares of stock?

    The debt to capital of a company changes when it issues new shares of stock by decreasing its amount of total debt in relation ... Read Full Answer >>
  6. What is the impact of retained earnings on stockholders equity?

    Stockholders' equity is a balance sheet item that represents the capital received from shareholders plus retained earnings. ... Read Full Answer >>
Related Articles
  1. Investing

    Dividend Yield For The Downturn

    High-dividend stocks make excellent bear market investments, but the payouts aren't a sure thing.
  2. Bonds & Fixed Income

    Understanding Bond Prices and Yields

    Understanding this relationship can help an investor in any market.
  3. Mutual Funds & ETFs

    The Bond Market: A Look Back

    Find out how fixed-income investments evolved in the past century and what it means today.
  4. Active Trading

    Guard Your Portfolio With Defensive Stocks

    Find out how these securities can protect you from a market bust.
  5. Bonds & Fixed Income

    5 Basic Things To Know About Bonds

    Learn these basic terms to breakdown this seemingly complex investment area.
  6. Investing Basics

    How Dividends Work For Investors

    Find out how a company can put its profits directly into your hands.
  7. Options & Futures

    Handling High-Yield Savings Accounts

    Is this the savings route for you? Read on to find out what these accounts have to offer.
  8. Fundamental Analysis

    What is Quantitative Analysis?

    Quantitative analysis refers to the use of mathematical computations to analyze markets and investments.
  9. Charts & Patterns

    How to Analyze Pharma Stock Fundamentals

    What you need to know about analyzing the fundamentals of pharma stocks.
  10. Charts & Patterns

    Why These May Be the Top 4 Growth Stocks of 2015

    These four stocks have high upside potential in 2015.

You May Also Like

Hot Definitions
  1. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  2. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  3. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  4. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
  5. Adverse Selection

    1. The tendency of those in dangerous jobs or high risk lifestyles to get life insurance. 2. A situation where sellers have ...
Trading Center