What is the 12-month rolling dividend yield?
The 12-Month Rolling Dividend Yield represents the sum of the dividend yield (non-annualized) for the 12 most recent regularly declared income dividends as well as any special income distributions in the intervening period.
Trailing 12-month distribution yield provides investors a historical measure by summing the income distributions over the past 12 months and dividing it by the current month-end net asset value (Figure 2). One of the drawbacks of this measure is that it is backward looking.
In general, 12-Month Yield gives a good picture of the current yield investors are receiving from their funds. (SEC Yield, in contrast, is a good measure of the income return currently priced into a fund's bonds.)
Yield is a measure of the fund's income distributions, as a percentage of the fund price. Morningstar calculates this figure by summing the income distributions over the trailing 12 months and dividing that by the sum of the last month's ending NAV plus any capital gains distributed over the 12-month period.
Distribution yield, also known as Trailing Twelve Month (TTM) yield, is used in the context of mutual funds and Exchange-Traded Funds (ETFs). It is a backward-looking calculation that divides a fund's cumulative distributions over the previous 12 months by the fund's net asset value at the end of the period.
The 12-month rolling sum is the total amount from the past 12 months. As the 12-month period “rolls” forward each month, the amount from the latest month is added and the one-year-old amount is subtracted. The result is a 12-month sum that has rolled forward to the new month.
- Annual Dividends = Dividend Payment Per Period * Dividend Frequency.
- Dividend Yield = Annual Dividends / Current Share Price.
- Dividend Yield = (Dividend Payment Per Period * Dividend Frequency) / Current Share Price.
The No. 1 consideration in buying a dividend stock is the safety of its dividend. Dividend yields over 4% should be carefully scrutinized; those over 10% tread firmly into risky territory.
The 30-day SEC yield is based on a standardized calculation, while distribution yields (TTM) may be calculated differently depending on the fund issuer or data provider.
This value is then annualized. The 30-day SEC yield may not always match the rate that the ETF is distributing cash dividends. This is because ETFs pay out dividends for bonds based on their yields to maturity when the bonds enter the portfolio.
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Assume that a mutual fund has a current market price of $20 per share and paid $0.04 in monthly dividends over the past year. The trailing twelve month mutual fund yield would be calculated by dividing the annual dividends paid by the share price. Thus, the yield would be $0.48 ÷ $20 = 0.024, or 2.4%.
The calculation of the Standardized 30-Day Subsidized Yield is mandated by the SEC and is determined by dividing the net investment income per share earned during the period by the maximum public offering price of the Fund (“POP”) per share on the last day of the period. This number is then annualized.
TTM yield can also refer to the dividend yield for a stock paid out over the prior 12 months. For instance, if a company with $100 stock paid a $0.10 quarterly dividend over the past four quarters, the TTM yield would be: (0.10 + 0.10 + 0.10 + 0.10)/$100 = 0.4%.
Distribution rates are usually based on fund distributions paid over time — typically a 12-month period. The fund distributions per share are then divided by the fund's price per share to arrive at a yield. This information gives the investor an indication of how much the fund paid on an historical basis.
Trailing 12-month, or TTM, refers to the past 12 consecutive months of a company's performance data used for reporting financial figures. By consistently evaluating trailing 12-month numbers, company financials can be evaluated both internally and externally without regard for the artificiality of fiscal year-end.
A common rolling return period is trailing 12 months (TTM). Trailing 12 months is the term for the data from the past 12 consecutive months used for reporting financial figures.
A “rolling” chart is just like a rolling budget: it displays the last x months (typically, the past 12 months), but keeps up to date automatically.
12 mtd goes back 12 months, whereas a ytd is from the first day of the current year (calendar, fiscal, whatever) to the current day.
To generate $5,000 per month in dividends, you would need a portfolio value of approximately $1 million invested in stocks with an average dividend yield of 5%. For example, Johnson & Johnson stock currently yields 2.7% annually. $1 million invested would generate about $27,000 per year or $2,250 per month.
How much to make 3,000 a month in dividends?
A well-constructed dividend portfolio could potentially yield anywhere from 2% to 8% per year. This means that to earn $3,000 monthly from dividend stocks, the required initial investment could range from $450,000 to $1.8 million, depending on the yield.
While dividend yield refers to the percentage of the current stock price of a company paid out as dividend over a year, dividend rate is the amount of money that company pays to its shareholders as dividends on per-share basis.
| Dividend Stock | Current Dividend Yield* | Analysts' Implied Upside* |
|---|---|---|
| Johnson & Johnson (JNJ) | 3.1% | 25.3% |
| Merck & Co. Inc. (MRK) | 2.4% | 10.6% |
| Chevron Corp. (CVX) | 4% | 30.8% |
| Coca-Cola Co. (KO) | 3.3% | 18.1% |
Living off dividends is a financial strategy that appeals to those aiming for a reliable income stream without tapping into their investment principal. This approach has intrigued many investors, from early-career individuals to those nearing retirement.
| Stock | Trailing annual dividend yield* |
|---|---|
| Crown Castle Inc. (CCI) | 5.9% |
| Pfizer Inc. (PFE) | 5.9% |
| Boston Properties Inc. (BXP) | 6.2% |
| Kinder Morgan Inc. (KMI) | 6.2% |
