FAQ
A few answers to commonly asked questions
Here are the answers to a few questions that are commonly asked. We will add to this list over time.
What is current yield?
Current yield is the most recent dividend payment, divided by the current price, multiplied by the number of times paid per year.
So for example, an $0.1234 dividend on an $56 share price that pays weekly is
($0.1234/$56)*52 = 11.45%
If you have a $1.2345 dividend on a $67 share price that pays monthly, that is
($1.2345/$67)*12 = 22.11%
And a $12.3456 payment on a $78 share price that pays an annual dividend is
($12.3456/$78)*1 = 15.82%
We’ve made several arguments about why relying solely on current yield is problematic. Those arguments are encapsulated in this post:
What is “peak-to-valley?”
Peak-to-valley is typically what is known as “max drawdown” or — “from the highest high, what is the lowest low?”
At Dividend Farmer we use peak-to-valley a little bit differently and it is more along the lines of “peak-to-valley or valley-to-peak.”
Which means that instead of looking at how far things have gone forward from a new highest high to a subsequent new lowest low, we look at “peak-to-valley” omni-directionally.
So our “peak-to-valley” looks both forward AND backward.
This is useful because it gives a better sense of the overall volatility of an investment — whether it goes up or down (or both).
“Trading range” might be a useful synonym for the Dividend Famer peak-to-valley (range between highest high, and lowest low).
Here’s how we calculate it.
If a stock at $12.34 (its low price) goes to $56.78 (its high price), we subtract the low from the high, take the negative of that number, and divide it by the high price:
-(56.78-$12.34) / $56.78 = -$44.44 / $56.78 = -78.27%
Peak-to-valley in this equation is ALWAYS negative — but provides a good indicator of the actual differential between the highs and lows of an investment.
This is similar to Sharpe Ratio in a way (which gives an overall sense of volatility) — but our peak-to-valley-to-peak metric is a hard number that is easy to understand.
A good current example is ULTY — which had a $20.55 high, a $4.46 low (as of 11/7/2025) and so the math there is
-($20.55 - $4.46) / $20.55 = -78.30%
While that number doesn’t tell you anything definitive — nor is it a measure of future success — it does provide a good, easy-to-understand benchmark that operates in both directions.
You can do the same math for a significant gainer like HOOW which had an $86.16 high, and a $50 low:
-($86.16 - 50) / $86.16 = -41.97%
The key element there is the difference between $86.16 and $50.00 or $36.16 — which is great if you can buy low, and sell high.
But since that never happens — “peak-to-valley-to-peak” is useful because it gives an immediate sense of the overall range (relative to the high) that you’re dealing with.
Currently HOOW is at $58.59 — so just $8.59 off the low. So still within that current range off the high…
-($86.16 - $58.59) / $86.16 = -31.99%
…but not too far off.
Our “peak-to-valley” might also more aptly be called a “high-to-low-watermark” — where the high and low range are kind of moving targets — and keep changing over time.
But for a falling investment (or a strongly advancing one) that number will get more and more negative — indicating a bit of caution (or a second look at the underlying numbers) might be worthwhile.
What’s With the Gnome Art?
Well, that’s a pretty easy one. We initially did the posts with rather boring farming scenes, and then one day we were playing around with Substack’s AI image generator — and some of the things we came up with were so side-splittingly funny we decided to put one of those at the top of each post.
What we do is pretty boring — dividend stock stats. Hundreds of them.
The gnome art is there to make you chuckle, or make you say “aww” if there is a cute creature, or provide a pithy Zen-like saying to lighten your day.
There’s enough investment clickbait out there with red and green arrows and big text — but we thought, why not try to create some fun — and occasionally hilarious art while we are doing this.
We hope you enjoy them — and apologize in advance if we offend anyone’s sensibilities.
Why isn’t there a forum?
Per our Disclaimer, Dividend Farmer is not a registered investment advisor.
What that means is that while we can produce a newsletter and publish it, we can’t have any interpersonal interactions with our readers. It’s just a thing.
It’s why we don’t provide customizable spreadsheets, portfolios, or anything like that, except in very very general terms.
The goal of the site is “Moneyball for Dividends” where YOU pick your own team of dividend stocks.
We’re fairly certain you should be able to beat the Big Dogs —
— but even if you can’t in a given year, picking your own team of stocks is kind of a fun intellectual exercise.
While we appreciate the support and camaraderie a forum can provide — forums have their negative aspects too — and we just decided early on not to do that.