2

This should be fairly straightforward.

How do I calculate the dividend yield myself for the Dow 30 / Dow Jones Industrial Average (DJIA)?

I'm thinking I just add the last dividend for all the stocks together and divide them by the DJIA.

My real question is, do I have to do anything else with the divisor?

Thank you in advance. Just trying to get a quick answer.

  • 1
    The DIA ETF tracks the Dow. Its dividend yield will be similar to the Dow. – JoeTaxpayer Jun 19 '13 at 21:28
  • I've made this question's title specific to the DJIA, since it is a price-weighted index and the answer wouldn't apply to other kinds of indexes. – Chris W. Rea Jun 20 '13 at 16:07
-2

Yes, that is exactly what you'll need to do.

Following the formula of:

Dividend Yield = (Annual Dividends per Share) / (Price per Share)

All you will need to do is plug in:

(Sum of annual dividends per share for each company in the DJIA) / (DJIA value) To get your answer.

Source: http://www.investopedia.com/terms/d/dividendyield.asp

  • Thank you! I'll do that. Thanks for the reference to investopedia too. – FinanceMajor Jun 20 '13 at 11:34
  • I found conflicting information. – Chris W. Rea Jun 20 '13 at 16:05
1

You'll find a description of the calculation at:

Quote:

The aggregate dividend yield on the 30 stocks that make up the Dow Jones Industrial Average. The DJIA yield is calculated by adding the dividends of all 30 component stocks, dividing the result by the price-weighted DJIA index value and factoring in the Dow multiplier. [...]

  • Thanks Chris, How would I go about "factoring in the Dow multiplier?" – FinanceMajor Jun 20 '13 at 23:07
  • I'm assuming they mean multiply by it. – Chris W. Rea Jun 20 '13 at 23:52
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    Nope. It's truly a divisor. en.wikipedia.org/wiki/DJIA_divisor Why divide by say .125 and not multiply by 8? I can't say. But I remember in May of '86 when the divisor changed (as it does regularly) from being a number above one to under. So it may be for consistency. – JoeTaxpayer Jun 21 '13 at 3:34

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