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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.

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.

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  1. Where can I find all of the stocks in the Dow Jones Industrial Average?

    The best place to find a list of all thirty stocks included in the Dow Jones Industrial Average (DJIA) is the "Historical ... Read Answer >>
  2. What does the Dow Jones Industrial Average measure?

    The Dow Jones Industrial Average (DJIA) is a price-weighted index that measures the daily price movements of 30 large American ... Read Answer >>
  3. How many components are listed on the Dow Jones Industrial Average?

    Learn how many components comprise the Dow Jones Industrial Average and understand the stock index's origins and how it is ... Read Answer >>
  4. What is the difference between the Dow and the Nasdaq?

    The Dow refers to the Dow Jones Industrial Average (DJIA) index, while the Nasdaq refers to the Nasdaq Composite Index Read Answer >>
  5. Why is the Dow Jones Industrial Average (DJIA) price weighted?

    Learn how the Dow Jones Industrial Average has told the story of the broad market through its simple, price-weighted calculation ... Read Answer >>
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