Not exact matches
It is a conditioning screen for the
dividend yield scan because,
by itself, it does not
indicate if the
dividend yield is high or low, nor will it
indicate if the stock is priced attractively.
Popular metrics of aggregate market valuation, such as Wilshire Total Market Index to U.S. GDP, price to forward earnings ratio, price to book value ratio, price to cash flow ratio, cyclically adjusted price to earnings ratio (CAPE), the ratio of annual forward
dividend to price (
dividend yield),
indicate the U.S. stock market is overvalued
by between 10 per cent and 60 per cent.
Index components are weighted
by their
indicated annual net
dividend yield, i.e. the largest
dividend -
yielding companies have the highest weight in the index.
October 2002
by John Bajkowski If a stock's price rises faster than its
dividend, the
dividend yield will fall,
indicating the price may have been bid up too far.
April 2007
by Wayne Thorp The Dow Dogs methodology emphasizes out - of - favor Dow stocks that are possibly underpriced relative to others, as
indicated by high
dividend yields.
Weiss primarily looks toward the
dividend yield (current annual
indicated dividend payment divided
by share price) to identify when stocks are undervalued or overvalued.
For example, a company with a high
dividend yield and low
dividend payout ratio (or high
dividend coverage ratio)
indicates that the company's
dividend yield is supported
by its strong earnings.
The
yield is determined
by dividing the amount of annual
dividends per share, called the
indicated dividend,
by the current market price per share of the stock.