Dividend investing
Choosing securities for a regular cash flow from payouts: what matters is not the price move but how steady and predictable the dividend itself is.
How to read the number
Ranking candidates on current yield alone gets nowhere: the things to look at are the share of profit sent out as a payout and the ability of the business to keep it up in a weak year.
When the metric lies
A high yield usually means a fallen price rather than generosity: the market prices in a cut before it is announced. A dividend is not an obligation — the board is free not to recommend one.
Also known as: income investing