Consider Your Portfolio's Yield Target

This is the second in a series of articles elaborating on the 9 Steps To Build and Manage a Dividend Portfolio. The average dividend yield of a portfolio says a lot about the portfolio itself. To calculate the portfolio dividend yield, simply add up the annual dividends from all holdings, and divide by the total stock portfolio value. Depending on the type of portfolio you have, it may be useful to divide it into sections. For instance, a given portfolio might consist of cash, Treasuries, bonds, non-dividend-paying stocks, and dividend-paying stocks. In this case, to get a meaningful average yield, isolate the dividend stock component of the portfolio, and divide the dividend income from that component by the total worth of that component. Average Yield = (Total Dividend Income) / (Total Dividend Stock Worth) Dividend Growth Portfolio An average yield between approximately 2.5% and 5% is suitable for those who... Read more

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