This metric answers the question of what percentage return dividends provide on the invested amount. If a share costs 12,000 sum and the dividend is 1,800 sum, the dividend yield equals 15%.
The value depends on the purchase price, so different investors have different yields for the same security. Those who bought cheaper receive higher returns on their investment with the same payment amount. Yield calculated at the current price is a reference point for a new buyer, not a characteristic of the company itself.
A high value requires verification, not celebration. It arises in two opposite situations: either the company genuinely shares profits consistently, or the share price fell due to business deterioration, and the market doesn't expect the payment to be repeated. A special case is a one-time large dividend from asset sales, which creates an illusion of high yield for one year.
Therefore, one should look at the payment history over several years, the percentage of profit directed to dividends, and the stability of the profit itself. Last year's dividend yield guarantees nothing about the future—unlike bond coupons, whose amount is fixed in the issuance terms.