BNET Business Dictionary
Business Definition for: Yield
- a percentage of the amount invested that is the annual income from an investment.
Yield is calculated by dividing the annual cash return by the current share price and expressing that as a percentage.
Yields can be compared against the market average or against a sector average, which in turn gives an idea of the relative value of the share against its peers. Other things being equal, a higher yield share is preferable to that of an identical company with a lower yield.
An additional feature of the yield (unlike many of the other share analysis ratios), is that it enables comparison with cash. Cash placed in an interest-bearing source like a bank account or a government stock, produces a yield—the annual interest payable. This is usually a safe investment. The yield from this cash investment can be compared with the yield on shares, which are far riskier. This produces a valuable basis for share evaluation.
Share yield is less reliable than bank interest or government stock interest yield, because, unlike banks paying interest, companies are under no obligation at all to pay dividends. Frequently, if they go through a bad patch, even the largest companies will cut dividends or abandon paying them altogether.
Wiktionary Definition for: Yield
- #To give way; to allow another to pass first
- Ex:'''''Yield''' the right of way to pedestrians.''
- #To give as required; to surrender, relinquish or capitulate.
- Ex:''They refuse to '''yield''' to the enemy.''
- #To produce as return, as from an investment
- Ex:''Historically, that security '''yields''' a high return.''
- #To produce as a result.
- Ex:''Completing the mathematics correctly '''yields''' a result of five.''
- A product; the quantity of something produced
- Ex:''Zucchini plants always seem to produce a high '''yield''' of fruit.''
Additional Resources
- Bond Yield Calculator
- The Bond Yield Calculator for Excel or OpenOffice Calc enables the automatic generation of scheduled bond payments and the calculation of resulting yield to maturity. The model is equipped to handle 'odd' first time periods and is ideal to speed up bond payment and yield calculations. ...
- Tools & templates 2008-01-01
- Is Now the Time for High Yield
- The 4th Quarter of 2002 was one of the strongest performing periods since 1991 for the Lehman Brothers US Corporate High Yield Bond Index High Yield as high yield spreads tightened over 175 basis points generating a total return of 6.7%. With yields at 11.5%, off an October month-end high...
- White papers 2003-01-01
- Analysis of Yield Spreads on Commercial Mortgage-Backed Securities
- Yield spreads on commercial mortgage-backed securities CMBS are defined as the difference between the yield on CMBS and the yield on comparable-maturity Treasuries. CMBS yield spreads declined dramatically from 1992 until 1997, then increased in 1998 and 1999. The relationship between CMBS yield spreads and other variables is estimated in...
- White papers 2002-01-01
- FRS17 and Estimates of the Sterling Double: A Corporate Yield Curve
- This paper argues that the appropriate discount rate to use to report defined benefit pension plan liabilities in the financial statements is a yield derived from an estimate of a double A corporate yield curve. It introduces a new class of credit spread models finding that they obtain more robust...
- White papers 2004-01-01
- Renesas Technology Adopts Ponte's Model-Based Yield Analysis Technology; Will Use for 65nm Technologies and Work With Ponte for Advanced Yield Analysis Technologies
- MOUNTAIN VIEW, Calif. -- Ponte Solutions, Inc., the design-for-yield company, today announced that Renesas Technology Corp., Japan has adopted its model-based yield analysis technology for critical area analysis and enabling reduction of yield-loss due to random defect-limited yield issues. The two companies will work together on more advanced analysis, addressing...
- Research articles 2005-10-20
- The Yield Curve and Investor Sentiment (Part II)
- John Jagerson submits: In the last section I talked about what a normal yield curve is and what it usually looks like. However, the yield curve will change over time and these changes can be very important indications for what investors think about the market today and what they...
- External links 2008-08-27
- A Guide to High Yield Bond Investing
- This report gives a brief overview of high yield bonds to help investors better understand how this type of investment can be used as part of an overall strategy to achieve their long-term financial goals. There are two primary reasons to consider high yield bonds: first, they offer the potential...
- White papers 2004-06-11
- Cadence Introduces Industry's First Yield Diagnostics Tool; Encounter Test Pinpoints Most Critical Design-Related Yield Issues
- SAN JOSE, Calif. -- Cadence Design Systems, Inc. (NYSE:CDN) (Nasdaq:CDN) today announced CadenceR EncounterTM Diagnostics, the industry's first yield diagnostics tool. Encounter Diagnostics accelerates yield by identifying customers' most critical nanometer IC yield issues and precisely locating root cause defects. The result is higher yield in less time. The new...
- Research articles 2004-10-19
- Financial Pricing Models for Property-Casualty Insurance Products: Investment Yields
- The investment yield used in a financial pricing model greatly affects the indicated premium. The proper investment yield depends on the target return on capital. If the target return on capital compensates for both investment risk and insurance risk, the investment yield should be the pre-tax yield expected to be...
- White papers 2004-03-10
- The Yield Curve and Investor Sentiment (Part I)
- John Jagerson submits: The yield curve is something that analysts and professionals will track but is rarely talked about by smaller individual traders. This is a very important topic right now as the market is hearing echoes of the credit crisis of July 2007. There are some important differences...
- External links 2008-08-26
- The flattening yield curve: after explaining the problem, as well as problems with its past management, the author tells bankers to listen to the Federal Reserve and the bond mavens when trying to deal with a flat and inverted yield curve. He also tells u
- Few banks have planned adequately for the flattening yield curve. Historically, the vast majority of banks have relied on three things: death, taxes, and a rising yield curve. The rising yield curve made it easy and attractive to borrow short and lend long. If most of the loans stayed current,...
- Research articles 2006-05-01
- Putnam Managed High Yield Trust and Putnam High Yield Trust Merge
- BOSTON -- Putnam Managed High Yield Trust (NYSE: PTM) and Putnam High Yield Trust completed their previously announced merger in a closing held today.
- Research articles 2006-10-30
- What Is My Current Yield On Coupon Income Received?
- This calculator shows the current yield of a bond. Yields are provided before and after taxes. Current yield equals the bond coupon rate divided by the bond's current price.
- Tools & templates 2008-01-01
- Bond Expert: Thursday Outlook
- John Jansen submits: Prices of treasury coupon securities are virtually unchanged in overnight trading. The yield on the 2 year note has dropped 1 basis point to 2.62 percent. The yield changes on the other benchmarks are so minute as to be imperceptible so I will call them unchanged....
- External links 2008-07-31
- Electroglas Adds Q-YIELD Module to its Knights Technology Product Line; New data mining software for YieldManager accelerates problem solving
- SANTA CLARA, Calif.--BUSINESS WIRE--Oct. 14, 1997-- Electroglas, Inc. (NASDAQ:EGLS), a market-leading supplier of expert wafer probing, information management and software-based manufacturing and yield enhancement products to the global semiconductor industry, today announced it has added Q-YIELDTM, the industry's only stand-alone data mining software module, to Knights Technology's comprehensive line of...
- Research articles 1997-10-14
- AMD Purchases Yield Dynamics Software for Worldwide Yield Management
- Business Editors/High-Tech Writers
- Research articles 2002-03-15
- Yield Dynamics and AMD Form Integrated Yield Management Relationship
- Business Editors/High-Tech Writers
- Research articles 2002-07-23
- What Is My Yield To Maturity?
- Yield to maturity is the rate of return you earn on a bond if you hold the bond to maturity. Yield to maturity assumes that the interest coupons you receive on the bond can be reinvested at the same rate. Yields are shown on a before- and after-tax basis.
- Tools & templates 2008-01-01
- APS Financial Corporation Initiates Coverage of Vertis, Inc. High Yield Notes
- APS Financial has initiated coverage of Vertis, Inc. High Yield Notes (bond symbol: VERTIS). The Company is being covered by Senior Vice President & Director of High Yield Research, Joel D. Luton. For more information and a copy of the comprehensive research report, please contact High Yield Associate Analyst...
- Research articles 2006-08-16
- Bond Expert: Friday Outlook
- John Jansen submits: Prices of Treasury coupon securities have posted, on balance, small declines in overseas trading. The yield on the benchmark 2 year note is unchanged at 2.51 percent. The yield on other benchmark issues has climbed by 1 basis point. Thus, the yield on the 5 year...
- External links 2008-08-01
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