For the average investor, a convenient indicator when choosing dividend-paying stock is the amount of cash dividend payout. However, this can be very misleading. A better way would be to look at the dividend yield or dividend payout ratio as a measure of risk and investment screening. Dividend yield is the ratio of the dividend payout to the share price and provides a better measure for the dividend policy of a firm as the total return from dividend is balanced out with stock price appreciation. Caution should be given as the dividend yield can be artificially inflated by fluctuations in stock price. Dividend payout ratio, which is the total dividend payout over the earnings of the firm, is usefid for estimating potential dividend payout in the future periods in relation to the earning of the firms.