Dividend yield is usually annual dividend per share divided by the current share price. It helps compare income levels, but it does not by itself show whether a stock is attractive.
High yield may come from a falling price
If the share price falls because earnings deteriorate, dividend yield rises mechanically. Investors should then assess whether the dividend may be cut.
Payout ratio and cash flow matter more
Stable dividends need support from profits and free cash flow. Companies with excessive payout ratios are more likely to cut distributions in downturns.
