What is an Accidental High Yielder?

An accidental high yielder is a stock that yields a usual but high dividend for a company. The yield for this stock outweighs the normal yield of stocks, it is not what the company expects, it is therefore an accidental high yielder. A stock can be referred to as an accidental high yielder if the dividends a company earns from the stock is an abnormally high dividend or an unusual yield.

What qualifies as an Accidental High Yielder?

A stock that has a dividend yield greater than what the yield of a benchmark average should be is an accidental high yielder. In this case, the dividend yield of the stock increases while the actual dividend payout remained unchanged. An accidental high yielder is a common trait in the bear market, this is because when stock prices fall, the dividend yield of the stock increases and exceeds that of the market benchmark. A company is said to have an accidental high yielder when the dividend yield of a stock increases and pays an unintended excessive dividend yield to investors despite that the price of the stock fell.

Accidental High Yielder and Dividend Yields

Investors of a company are entitled to the earnings of the company which are distributed as dividend yields. This does not necessarily mean cash payment, it may be shares or stocks owned by the company. Usually, dividends are paid at set times, it can be quarterly, monthly or at an agreed schedule. The dividend yield of a company is important to investors as it helps them decide whether to invest in a company or not. An accidental high yielder is however a stock owned by a company or an investor that yields abnormally high dividends. The dividend yield is often unexpected and higher than the normal dividend yield.