The annual dividend income paid by a stock or fund, expressed as a percentage of its current share price — calculated as annual dividends per share ÷ share price.
A dollar amount doesn't tell you much on its own — $1 a year sounds tiny on a $500 stock but huge on a $10 stock. Dividend yield converts that dollar figure into a percentage so you can fairly compare income across totally different investments, the same way "miles per gallon" lets you compare a truck and a sedan regardless of tank size.
A stock priced at $50 that pays $1.50 in dividends per year has a dividend yield of $1.50 ÷ $50 = 3%. If that same stock's price drops to $40 while the dividend stays the same, the yield rises to 3.75% — yield moves opposite to price when the dollar payment doesn't change, which is why a very high yield can sometimes be a warning sign rather than a bargain.