What Is a Good Dividend Yield for Your Industry?
First things first: what is a dividend yield? A financial ratio that indicates how much a company pays out in dividends each year relative to its share price. Dividend yield is represented as a percentage and can be calculated by dividing the dollar value of dividends paid in a given year per share of stock held by the dollar value of one share of stock.
Now, what is a good dividend yield?
Well, this differs by industry.
For example, the average dividend yield of the industrial goods sector is approximately 1.71%. The industrial goods sector is a group of public companies that are related to production goods used in construction and manufacturing. The industrial goods sector includes 19 subindustries, such as the aerospace-defence – major diversified, aerospace-defence products and services, cement, diversified machinery, and farm and construction machinery.
Here’s how other dividend yields compares to their industries:
- Basic materials: 4.96%
- Consumer goods: 2.22%
- Financial 4.18%
- Healthcare: 2.29%
- Industrial: 1.77%
- Services: 2.37%
- Technology: 3.2%
- Utilities: 3.96%
The basic materials sector has an average stock dividend yield of 4.92%, while basic material stocks in the S&P 500 have an average yield of 2.5%. The highest yielding industries in this basic materials sector are Oil & Gas Equipment & Services and Oil & Gas Refining & Marketing. Both of these industries have average yields over 5%.
Products in the consumer goods sector include all products that are purchased by consumers rather than manufacturers and businesses. The types of products in this sector range from auto parts to food products to paper products to apparel.
The average dividend yield in the sector as a whole is 2.22%, while the average consumer goods yield for stocks listed in the S&P is 2.5%. The highest yielding industry within this sector is the cigarette industry, which is well known for its high yields.