Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its share price. The annual dividend income per share an investor receives from a company divided by its current share price. Normally, investors would like to see a dividend yield between 2% and 20% for a dividend-paying company. The dividend yield financial ratio reflects the % of profits a company makes in dividend payments over the course of a year. The dividend yield is an important factor to consider when investing in dividend- paying stocks.