Yield

What is Yield? — Definition

Yield measures the income return on an investment. For bonds, it's the annual interest payment divided by the current bond price. For stocks, it's the annual dividend divided by the current stock price. Yield moves inversely to price: when bond prices rise, yields fall, and vice versa.

The 10-year U.S. Treasury yield is one of the most important financial benchmarks in the world. It serves as a risk-free rate baseline — the minimum return required before investors take on additional risk. When the 10-year yield rises significantly (from 1.5% to 5%, as happened in 2022), equity valuations compress because future earnings are discounted more heavily.

Example

In 2020, the 10-year Treasury yield fell to 0.5% — near historical lows. This made stocks (with dividend yields of 1.5–2%) look very attractive by comparison. When yields shot back up to 5% in late 2023, many stocks — especially long-duration growth names — fell sharply because bonds now offered competitive income with far less risk.

BMInsider's Dividend Calendar tracks dividend yields across hundreds of stocks and alerts subscribers when yields reach historically elevated levels — which can signal either opportunity or distress depending on the underlying business.