what does TTM mean on dividend yield

TTM stands for Trailing Twelve Months, which is a financial term used to describe a period of time that spans 12 months from the current month. In the context of dividend yield, TTM refers to the dividend yield calculated based on the dividends paid over the past 12 months.

1. **Definition**: The Dividend Yield (TTM) is a financial metric that measures the annual dividend income an investor can expect relative to a stock’s current market price. It is calculated by dividing the annual dividends per share by the current market price per share and multiplying by 100 to express it as a percentage.
2. **Calculation**: For example, if a company pays $2 per share annually in dividends and its stock is priced at $40, the dividend yield (TTM) would be 5%. This calculation uses the total dividends paid over the past 12 months, providing a snapshot of a company’s dividend payout.
3. **Usage**: TTM figures are used in various financial metrics, such as earnings, EPS, P/E ratio, and yield. It is used to analyze the performance of mutual funds or exchange-traded funds (ETFs) by calculating the weighted average of the yields of all holdings over the last 12 months.
4. **Importance**: The TTM yield is an important indicator for investors, especially for income-focused investors, as it provides a clear picture of how much return they might receive from dividends based on the stock’s current price.

In summary, TTM in dividend yield refers to the dividend yield calculated based on the dividends paid over the past 12 months, providing a snapshot of a company’s dividend payout and is an important metric for investors to assess the income potential of a stock.