Dow Jones Industrial Average (DJIA) Yield

What Is the Dow Jones Industrial Average (DJIA) Yield?

The Dow Jones Industrial Average (DJIA) yield is the aggregate dividend yield on the 30 stocks that make up the Dow Jones Industrial Average (DJIA). The yield is dividend distributions partitioned by the index value separated by the Dow Divisor.

Grasping the Dow Jones Industrial Average (DJIA) Yield

The DJIA is as of now not a simply industrial index; the present DJIA contains healthcare, technology, and financial companies, which generally pay lower dividends than mature, [industrial-based](/industrial-products area) stocks.

The Dow contains 30 stocks that are changed now and again when required. Stocks that are incorporated have a high reputation, supported growth, and are of interest to a wide cluster of investors.

Large numbers of these stocks pay a dividend, regularly quarterly, which is a portion of the company's earnings distributed to shareholders. A few companies pay more than others, and some might pay no dividends by any stretch of the imagination.

The DJIA yield is posted on financial destinations. Yield and data are now and again more straightforward to find on a exchange-traded fund (ETF) that tracks the Dow, like the SPDR Dow Jones Industrial Average ETF Trust (DIA).

"Dogs of the Dow" is an investment strategy that spotlights on picking the best ten highest dividend-yielding stocks of the year.

The yield will vacillate as dividends are increased or diminished by the companies inside the index, as companies inside the index change, as weightings inside the index change, and furthermore as the price of the ETF or index changes since a stock's yield is calculated by separating dividends paid by price.

History of the Dow Jones Industrial Average (DJIA) Yield

Somewhere in the range of 1999 and 2009, the Dow dividend yield has vacillated from just above 1% in late 1999 to above 4% in mid 2009. Between January 2010 to mid 2021, the yield changed between generally 1.5% and somewhat higher than 3%.

At the point when the index drops down substantially, as it did during and following the Financial Crisis of 2008 and mid 2009, the dividend yield will in general move higher. As stock prices fall, companies may not cut their dividend right away. Dividend payouts may continue as before, however the price paid for those dividends (the index) is currently less expensive.

At the point when the Dow is moving up or sideways, particularly emerging from a recession, the dividend yield might rise. This is on the grounds that companies may be performing better, earning more profit, which prompts an increase in their dividends. In the event that this dividend growth outpaces the rise in the index, the yield will increase.

At the point when the index is advancing to the upside, dividend increases ordinarily don't keep pace, thus the yield starts to drop. Even if dividend payouts are rising, assuming that the index is expanding more, the yield will drop.

Illustration of the Dow Jones Industrial Average Yield

The SPDR Dow Jones Industrial Average ETF Trust (DIA) offers a yield of 1.64% as of February 7, 2022. Accepting no change in the index or dividend payouts, assuming an investor purchased the DIA at $350.90 — the closing price on that day — they would earn 1.64% in dividends in a single year.

Assuming the index falls from this level, and dividends and the stocks in the index stay something very similar, the yield will rise. Assuming that dividends and stocks in the index stay something similar while the index rises, the yield will drop. For different situations, the yield will rely upon the relationship of dividends relative to the index price movement.

Highlights

• The DJIA yield will likewise change assuming the dividend policy of any of the 30 companies changes.
• The DJIA yield will change as the company's inside the index change, their weighting inside the index changes, and the index value changes.
• The DJIA yield is the dividend yield of the 30 stocks that make up the DJIA.
• The DJIA yield is calculated as dividend distributions partitioned by the index value separated by the Dow Divisor.

FAQ

Could the Dividend at any point Yield of the Dow Jones Industrial Average Fluctuate?

Indeed. The DJIA yield can change as the index value changes and when a company and its weighting inside the index change. The DJIA yield may likewise change as dividend policies change for any of the 30 companies inside the index.

How to Invest in the Dow Jones Industrial Average (DJIA)?

Investors can't buy an index straightforwardly however rather can invest in an exchange-traded fund (ETF) that tracks it. The SPDR Dow Jones Industrial Average ETF Trust (DIA) tracks the DJIA.

What Is the Dividend Yield of the Dow Jones Industrial Average (DJIA)?

The Dow Jones Industrial Average yield is the dividend yield of the 30 stocks that comprise the DJIA. The SPDR Dow Jones Industrial Average ETF Trust (DIA) offers a yield of 1.64% as of February 7, 2022.