# Dividend Yield Definitions: SEC Yield vs. 12-Month or TTM Yield

When looking at the dividend payout of stocks and ETFs, there are actually a few different ways to measure dividend yield. In general, dividend yield is defined as:

$\frac{\text{annual dividends per share}}{\text{share price}}$

However, there are various ways you can define either of those terms. For the annual dividends, are you looking in the past, or projecting forward? Are you taking the share price at the end of last month, or the most current market price? When looking up information online, you should check to see which definition they are using.

SEC Yield / 30-day Yield
This standardized calculation for ETFs and mutual funds takes the dividends and interest accrued minus fund expenses during the most recent 30-day period ending on the last day of the previous month. That value is annualized (projected forward) and then divided by net asset value (NAV) at the end of that period. This figure works best for funds with regular dividend payments like many bond funds, but not so well for funds with uneven dividend distributions over a year.

Forward Dividend Yield / Projected Dividend Yield
This calculation for individual stocks takes the company’s most recent dividend payment and annualizes it. For example, if the last quarterly dividend paid was 25 cents, it would assume the annual dividend to be \$1.00 (even though it may not be). Then divide that by current share price.

12-Month Distribution Yield
This calculation used by Morningstar adds up the trailing 12-month’s income distributions from a fund and divides by the last month’s ending NAV (plus any capital gains distributed). This provides a historical view of actual dividends that were paid, but may not accurately represent the future.

Trailing 12 Month (TTM) Yield
Similar to above, but for individual stocks. Add up all the dividend payments from the last 12 months, and then divide by the current share price. This backward-looking method can help smooth out any variable or seasonal payouts over a year’s time.