Dividend yield is the annual cash dividend a company pays per share divided by its current share price, expressed as a percentage. It is calculated by multiplying the most recent quarterly dividend by four (or summing the last four payments) and dividing by the price. As of the September 4, 2026 close, Coca-Cola (KO) paid a quarterly dividend of $0.53, or $2.12 a year, on a price of $88.07, a dividend yield of 2.4%; Verizon (VZ) yielded 5.6%, Johnson & Johnson (JNJ) 1.9%, Microsoft (MSFT) 0.7% and Apple (AAPL) 0.3% [1]. A good dividend yield in September 2026 has to be judged against the 10-year Treasury, which paid 4.78% on September 4, 2026, so yields of 3% to 5% from companies that grow their payouts are competitive while yields far above the Treasury deserve scrutiny [2].
What is dividend yield and how is it calculated?
The formula is annual dividends per share divided by share price. Two versions are common:
- Forward (indicated) yield annualizes the latest declared dividend. Coca-Cola's $0.53 quarterly payment times four is $2.12; divided by $88.07 that is 2.41% [1].
- Trailing yield sums the last four payments actually made. Coca-Cola paid $0.51, $0.51, $0.53 and $0.53 over the four quarters to June 2026, a total of $2.08, for a trailing yield of 2.36% [1].
Yield moves inversely with price. If Coca-Cola's shares fell to $80 with the dividend unchanged, the yield would rise to 2.65%; at $100 it would fall to 2.12%. This is why a rising yield is not automatically good news: it can mean the dividend grew or that the price dropped.
Dividend yields of six large companies, September 4, 2026
| Company | Latest quarterly dividend | Annualized dividend | Close Sept. 4, 2026 | Dividend yield |
|---|---|---|---|---|
| Verizon (VZ) | $0.708 | $2.83 | $50.14 | 5.65% |
| Coca-Cola (KO) | $0.53 | $2.12 | $88.07 | 2.41% |
| Johnson & Johnson (JNJ) | $1.34 | $5.36 | $275.23 | 1.95% |
| Microsoft (MSFT) | $0.91 | $3.64 | $499.70 | 0.73% |
| Nvidia (NVDA) | $0.25 | $1.00 | $230.36 | 0.43% |
| Apple (AAPL) | $0.27 | $1.08 | $319.97 | 0.34% |
Source: dividend history and closing prices from DataPorium's stock market data [1]. Nvidia raised its quarterly dividend from $0.01 to $0.25 in 2026, yet its yield remains below half a percent because the share price is high relative to the payout [1].
What is a good dividend yield in 2026?
The benchmark is the risk-free rate. On September 4, 2026 the 2-year Treasury yielded 4.37%, the 10-year 4.78% and the 30-year 5.24% [2]. A stock yielding 2.4% therefore pays less current income than a government bond, and its owner is relying on dividend growth and price appreciation to make up the gap. Three points help judge whether a yield is good:
- Growth rate. Coca-Cola raised its quarterly dividend from $0.485 in 2024 to $0.51 in 2025 and $0.53 in 2026, about 3.9% in the latest step; Microsoft raised its payment from $0.83 to $0.91, about 9.6%; Johnson & Johnson from $1.30 to $1.34, about 3.1%; Verizon from $0.69 to $0.708, about 2.6% [1]. A 2.4% yield growing at 4% to 10% a year can overtake a fixed 4.78% bond coupon over a decade.
- Payout ratio. Dividends divided by earnings. A ratio under 60% leaves room for reinvestment and for bad years; ratios near or above 100% mean the dividend is being funded from debt or asset sales.
- Yield relative to the company's own history and its sector. Telecom and utilities normally yield more than technology because they grow more slowly; a technology company with a 5% yield would be a warning sign.
On this basis, a good dividend yield in September 2026 for a growing large company is roughly 2% to 4%, with utilities, telecoms and real estate investment trusts reasonably paying 4% to 6%. Verizon's 5.65% sits above the 30-year Treasury, which the market accepts because the company's dividend growth has been slow and its debt load is large [1][2]. Yields far above 6% often mean the market expects a cut.
How investors use dividend yield
- Income planning: a $500,000 portfolio yielding 2.4% produces $12,000 a year; at 4% it produces $20,000. Retirees compare that with Treasury coupons and annuity rates.
- Total return: total return equals price change plus dividends. Reinvested dividends have provided a large share of long-run equity returns, and a rising dividend is a signal that management expects earnings to hold.
- Valuation check: yield is the inverse of the price-to-dividend ratio. When a quality company's yield rises well above its own five-year average without a dividend cut, the shares may be cheap; when it falls far below, they may be expensive.
- Screening: DataPorium's stock screener can filter by dividend yield, payout ratio and dividend growth, which helps avoid the trap of sorting by yield alone [3].
- Tax treatment: qualified dividends are taxed at long-term capital gains rates for most U.S. investors, which favors dividend income over bond interest in taxable accounts.
Investors may consider that the highest yields carry the most risk. A dividend is a promise, not a contract, and companies cut payouts when cash flow falls. A portfolio built on a 2.5% to 4% yield with consistent annual increases has historically delivered steadier income than one chasing 8% yields. The choice between a 4.78% Treasury and a 2.4% dividend growing at 4% a year comes down to time horizon: the bond wins for the next few years, the growing dividend tends to win over decades [1][2].
Dividend yield is annual dividends divided by price, and with the 10-year Treasury at 4.78% on September 4, 2026 a yield of 2% to 4% from a company that raises its dividend each year is a reasonable definition of good.
Key takeaways
- Dividend yield equals annualized dividends per share divided by share price; Coca-Cola's $2.12 on $88.07 gave 2.41% on September 4, 2026 [1].
- Yields on September 4, 2026 ranged from 0.34% for Apple to 5.65% for Verizon among the six companies reviewed [1].
- Compare yields with Treasuries: the 10-year paid 4.78% and the 30-year 5.24% on the same day [2].
- A good yield is 2% to 4% with steady growth for most large companies, 4% to 6% for utilities, telecoms and REITs.
- Very high yields often signal a coming cut; growth and payout ratio matter more than the headline number.
Frequently asked questions
How do you calculate dividend yield?
Multiply the latest quarterly dividend by four and divide by the current share price. Coca-Cola's $0.53 quarterly dividend times four is $2.12; divided by the September 4, 2026 close of $88.07 that is a 2.41% yield [1].
What is a good dividend yield in 2026?
For a growing large company, roughly 2% to 4%; for utilities, telecoms and REITs, 4% to 6%. With the 10-year Treasury at 4.78% on September 4, 2026, yields far above 6% usually reflect risk of a cut rather than a bargain [2].
Is a high dividend yield good or bad?
It depends on why it is high. A yield that rose because the dividend grew is good; one that rose because the share price collapsed may signal trouble. Check the payout ratio and dividend growth before buying.
What is Coca-Cola's dividend yield right now?
About 2.4% as of September 4, 2026, based on a $0.53 quarterly dividend ($2.12 annualized) and an $88.07 share price [1].
