What is the Difference Between Dividend and Dividend Yield?

The difference between dividend and dividend yield lies in the way they represent the income generated from owning shares of a company.

• Dividend: The dividend, also known as the dividend rate, is the absolute amount of dividends paid per share, typically expressed as a dollar figure. It represents the total expected income from a specific investment, such as a stock or a mutual fund.
• Dividend Yield: The dividend yield is a percentage that represents the ratio of a company's annual dividend compared to its current share price. It helps investors assess the income-generating potential of a company and provides more information on the rate of return. A higher dividend yield suggests higher income from investment in terms of dividend earnings.

In summary, the dividend rate indicates the total expected income from a specific investment, while the dividend yield provides more information on the rate of return and allows investors to compare the dividends of two or more stocks on a percentage basis. Both metrics are important for equities investors to evaluate their investments.

Comparative Table: Dividend vs Dividend Yield

Here is a table comparing the differences between dividend and dividend yield: