 The dividend yield ratio measures the percentage of a stock's market value returned annually to the shareholders in the form of a dividend. Preferred stockholders pay special attention to this ratio because they invest primarily to receive dividends. Dividend yield is a measure of stock marketability. The formula is dividends per share divided by the market price per share. For 2016, dividends per share divided by market price per share gives us a dividend yield of 4%. This means that investors are earning 4% per dollar invested, assuming a constant stock price. If the stock price also goes up, then the return is even higher.