Importance of Dividend Yield

The Yield Dividend is an indicator that reflects the return of a stock and is expressed in %. Since return is created by capitalizing the dividend and since the dividend is distributed on a monthly basis for the majority of enterprises, we will only consider the Monthly Dividend Yield here.

Why is the Dividend Yield so important ?

Because there is little economic data available for the companies being tracked and, if available, the data is not certified by a controlling organization, the dividend remains the only useful parameter to indicate trustworthiness of the company, her transparency and her willingness to share her business profits with her own stockholders.

Pb Asset Management selects, for her own investments, companies with a Monthly Dividend Yield above 3% and having a positive Dividend Growth (the percentual variation of the dividend compared to the previous month).

Why go for a Dividend Yield bigger then 3% ?

The 3% monthly return is the minimum return for a cash savings account at any bank in SL. Rates currently vary from 0.09% per day (2.7% monthly) until 0.3% per day ( 9.7% monthly). With these high interest rates and an SL economy that grows 15% per month, one can expect much higher returns from the stock market, seen the more risky nature of the capital market.

Pasha Boucher
Translation by Bella March