What dividend yield measures
Dividend or distribution yield expresses income as a percentage of an investment's price. A simplified calculation divides annual distributions per share by the current share price. If an investment distributes $5 per share annually and trades at $100, its indicated yield is 5%.
Yield can change because distributions change, the share price changes or both. A falling price can make the yield appear higher even when the cash payment has not increased.
What total return measures
Total return considers both cash distributions and price movement over a period. If an investment pays 10% in distributions but falls 15% in value, the economic result is not a 10% gain. Reinvestment, taxes and timing can change the exact calculation, but principal movement remains essential.
Why income investors still care about principal
An investor who plans to spend distributions may prioritize cash flow, but declining principal can affect future flexibility and the value available later. It can also signal that part of the distribution is not being supported by the investment's performance. That does not automatically make the investment unsuitable; it means the income should be evaluated in context.
Use both measures when comparing strategies
Review annual and monthly income, ending portfolio value, maximum drawdown and the amount that had to be reinvested to support the starting balance. Divvestor's Maintain metric is designed to make that tradeoff visible by estimating how much historical distribution income would have needed to stay invested to preserve starting principal.
See income and principal together
Compare distribution estimates with historical price movement in one strategy.
Related reading
Use the historical dividend calculator, explore reinvestment, or learn about return of capital.
Educational information only—not investment, tax or financial advice. Yield and total-return calculations depend on data and assumptions that should be independently verified.