What's the difference between dividend yield and annualized yield?
The dividend yield columns in the optimizer show different yield values.
This is because the optimized annualised yield takes account of the timing of dividend payments.
Consider the three dividend tab
Dividend yield simply adds up the three dividends and expresses them as a percentage of the current share price.
Anualised yield will take account of the number of days to realise the three dividend payments and so will always be lower than the Dividend yield. It is the annualised yield that is the important calculation because it takes account of the number of days. Rather like an APR.
As an ex dividend date draws near, the annualised yield and the dividend yield will converge and on the day before going Ex-dividend will be almost identical.
Consider the two dividend tab
Here, the opposite is true to the three dividend tab. Because of the timing of the dividends, the Annualised yield will always be higher than the actual yield. That is because the two dividends are always spread over a number of days that is less than 365 and as you get closer and closer to the ex dividend date, this yield will always be rising relative to the Dividend yield.
- What is the PE ratio?
- How can I find cheap shares?
- How is the dividend yield calculated?
- What is Market Cap?
- What does Mark-to-Market mean?
- What is day trading?
- What is a dividend?
- Forecast dividend Increase
- What does "Ex-Dividend" mean?
- Consecutive Annual Dividend Increases
- What is the OptimizerMax tool?
- What is the CountdownMax tool?
- What is the GeneratorMax Tool?
- What does cum dividend mean?
- The FTSE Quarterly Review
- What is the record date?
- What is Dividend Declaration?
- What is DRIP?
- An overview of dividend dates
- What is an ETF?
- What does CAGR stand for
- What are futures?
- What are Options?
- What does Fiduciary Duty mean?
- What is Shorting?
- What does going long mean?
- What is a share split?
- What is a Long-only fund?
- What is a long-Short fund?
- What is a rights issue?
- What is a share buyback?
- What is a Government Bond?
- What is a corporate bond?
- What is an ISA?
- What is the bid price?
- What is the offer price?
- What does Blue chip mean?
- What is the spreadbetting series?
- What is the spreadbetting price?
- What is the spreadbetting dividend?
- What is the spreadbetting level?
- What is the spreadbetting margin factor?
- what is the spreadbetting margin requirement?
- What is the spreadbetting yield?
- What is an IMS?
- Why does the FTSE 100 list more than 100 shares?
- What is dividend cover?