equity yield

Meanings

1. 1nouncountable or uncountablefinance

   the income from a share, usually its dividend, shown as a percentage of the share's price.

   Grammar: Can be used with a number or with 'a': an equity yield of 4%, or simply equity yield.

   Patterns

   • an equity yield of X percent
   • a high/low equity yield
   • the equity yield on something

   The company's equity yield is about 3.5 percent, which is low for its industry.

   Investors looking for income often compare the equity yield with the yield on government bonds.

   A falling share price can push the equity yield up even when the dividend stays the same.

2. 2noununcountablefinance

   the return an investor expects to earn from holding shares, including dividends and price gains.

   Grammar: Used in a general, uncountable way when talking about expected returns: demand a higher equity yield.

   Patterns

   • require a higher equity yield
   • expect an equity yield
   • the expected equity yield

   After the market fell, many funds demanded a higher equity yield before buying.

   Analysts debated whether the expected equity yield was realistic.

Word forms

Common combinations

a high equity yield

Utilities often offer a high equity yield because they pay steady dividends.

the equity yield on a stock

The equity yield on that stock fell after the price jumped.

an equity yield of 4 percent

The fund reports an equity yield of 4 percent.

compare equity yields

Managers compare equity yields across different markets.

the equity yield gap

The equity yield gap widened when bond yields rose.

Synonyms and how they differ

dividend yield

More precise: it counts only dividends, while equity yield can also include expected price gains.

return on equity

This measures profit against shareholders' money, not the income an investor receives from a share.

Word family

yield noun

the income or profit an investment produces.

equity noun

shares in a company, or the value of a company's shares.

yield curve noun

a line showing how yields change with the time until a bond is repaid.

Commonly confused: equity yield or return on equity? equity yield or earnings yield?

Practice

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