Dividend Yield is a financial metric that shows how much a company pays in dividends each year relative to its stock price. It is expressed as a percentage and helps investors understand the return they can expect from their investment in the form of dividends. A higher dividend yield may indicate a more attractive investment for those seeking income. To calculate dividend yield, divide the annual dividends paid per share by the current share price. For example, if a company pays $2 in dividends per share and its stock price is $40, the dividend yield would be 5%. This metric is particularly useful for income-focused investors.