- What is dividend yield?
- Dividend yield = Annual dividend per share ÷ Current share price × 100. It tells you what percentage of the current price you receive per year in dividends. A $2 annual dividend on a $50 stock = 4% yield.
- What's the difference between yield and yield on cost?
- Yield is based on CURRENT share price. Yield on cost is based on YOUR original purchase price. If you bought at $40 and the stock is now $80, current yield uses $80 in the denominator (lower yield) but yield on cost uses $40 (higher yield). YoC reflects YOUR effective income rate based on what you actually paid.
- Is a higher dividend yield always better?
- No. A high yield can signal: (1) a great income stock (good), (2) a stock whose price has dropped sharply (yield rises mathematically) — often because the market expects a dividend cut or fundamental issues. Always check the dividend trajectory: growing dividends beat high-but-stagnant yields, which beat declining dividends with high "current" yields.
- How often do US stocks pay dividends?
- Most US large-caps pay quarterly (4× per year). Some REITs and high-yield ETFs pay monthly. International stocks often pay semi-annually or annually. The frequency affects timing of cash flow but not the annual yield itself.
- How are dividends taxed?
- Qualified dividends (most US stocks held over 60 days) are taxed at long-term capital gains rates (0%, 15%, or 20% depending on income). Ordinary (non-qualified) dividends are taxed at your regular income tax rate. REITs typically pay non-qualified dividends. International dividends may have foreign tax withholding.
- How does TradersForge handle dividends in trade journaling?
- For dividend-paying stocks held through ex-date, the dividend payment shows as a separate transaction in your broker CSV. TradersForge categorizes these as dividend events (not trades) so your trade P&L and dividend income are tracked separately. Useful for income traders who want to see dividend yield as a distinct return component.