SHAREHOLDER RETURNS • GUIDE

Dividend Yield Explained

Understand dividend yield, payout ratio, dividend growth and dividend traps.

Dividend yield relates annual dividend per share to the current share price.

Payout

Compare dividends with earnings and free cash flow to assess sustainability.

Yield trap

A falling share price can mechanically increase yield while the business is deteriorating.

Corporate actions

Use the latest dividend announcement and record/ex dates rather than an outdated annual figure.

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