DEFINITION of 'Yield'
The income return on an investment. This refers to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment's cost, its current market value or its face value.
INVESTOPEDIA EXPLAINS 'Yield'
This seemingly simple term, without a qualifier, can be rather confusing to investors.
For example, there are two stock dividend yields. If you buy a stock for $30 (cost basis) and its current price and annual dividend is $33 and $1, respectively, the "cost yield" will be 3.3% ($1/$30) and the "current yield" will be 3% ($1/$33).
Bonds have four yields: coupon (the bond interest rate fixed at issuance), current (the bond interest rate as a percentage of the current price of the bond), and yield to maturity (an estimate of what an investor will receive if the bond is held to its maturity date). Non-taxable municipal bonds will have a tax-equivalent (TE) yield determined by the investor's tax bracket.
Mutual fund yields are an annual percentage measure of income (dividends and interest) earned by the fund's portfolio, net of the fund's expenses. In addition, the "SEC yield" is an indicator of the percentage yield on a fund based on a 30-day period.
The rate of return anticipated on a bond if held until the maturity ...
The amount of cash flow received or paid out by an annuity, REIT ...
Annual income (interest or dividends) divided by the current ...
A financial ratio that shows how much a company pays out in dividends ...
The pretax yield that a taxable bond needs to possess for its ...
A line that plots the interest rates, at a set point in time, ...