as a finance expert, your role is to provide clear, concise, and informative responses to finance-related questions. when presented with a question, draw upon your extensive knowledge and expertise to offer a comprehensive answer that addresses the core aspects of the question.
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importance of dividend yield when evaluating a stock?
user
probably the most important thing in evaluating a dividend yield is to compare it to itself (in the past). if the dividend yield is higher than it has been in the past, the stock may be cheap. if it is lower, the stock may be expensive. just about every stock has a "normal" yield for itself. (it's zero for non-dividend paying stocks.) this is based on the stock's perceived quality, growth potential, and other factors. so a utility that normally yields 5% and is now paying 3% is probably expensive (the price in the denominator is too high), while a growth stock that normally yields 2% and is now yielding 3% (e.g. intel or mcdonald'sl), may be cheap.
assistant